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| Addressing Judgment Liens Post-Bankruptcy: Three Takeaways for Debtor’s Counsel |
| In re Horvath provides a cautionary tale for debtors who seek to address judgment liens post-discharge, whether strategically or due to pre-filing negligence.
If the debtor has been sued before she files bankruptcy and a money judgment is entered, then a properly indexed lien attaches to real estate as a matter of law. This lien then clouds title and makes certain future actions — like a sale or refinancing — all but impossible. A bankruptcy discharge will not affect the lien without a properly noticed — and timely — avoidance action.
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| Not So Fast: 11th Circuit Upholds the Discharge Injunction to Bar Post-Discharge Collections Suit on a Nondischargeable Debt |
| On March 25, 2021, the Eleventh Circuit Court of Appeals ruled that a chapter 7 discharge prohibits the holders of a nondischargeable debt from suing the debtor post-discharge to collect a judgment. Specifically, the ruling in Suvicmon Dev. Inc. v. Morrison directs that a fraudulent-transfer action is not synonymous with execution of a judgment simply because the underlying debt is excepted from discharge. The court reasoned that “fraudulent transfer claims must be based on an underlying claim by a creditor, which the creditor could have sought to satisfy out of the asset that was transferred. However, as a distinct cause of action,
a fraudulent transfer claim is a claim distinct from the claim on which it is predicated, in this case the plaintiffs’ securities-fraud claims.” |
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| The Second Circuit’s Brunner Affirmation: Not a Death Knell for Dischargeability |
| February 2020 brought some good news for borrowers hoping to discharge their student loans in bankruptcy with Judge Cecelia Morris’s decision in Rosenberg v. N.Y. State Higher Educ. Servs. Corp. That hope seemed to be quashed again by the Second Circuit in March in an appeal by a different debtor in Tingling v. United States Dep’t of Educ., but a closer reading of the underlying facts should give most borrowers — particularly those who have made payments on their loans in the past — some reason to avoid despair.
Janet Tingling, a 50-something debtor with multiple advanced degrees and no dependents, sought to have her federal student loans discharged in her chapter 7 case.
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| Mazzara v. Provencher Illustrates Dischargeability in the Era of Social Media |
| In a pair of decisions, the U.S. Bankruptcy Court for the Western District of Texas took on two fundamental issues arising in an adversary proceeding for nondischargeability concerning a judgment for defamation arising out of alleged sexual misconduct. In Joseph Mazzara v. Donna Shute Provencher, the bankruptcy court grappled with the following issues: (1) whether defamation findings in state court are binding in bankruptcy; and (2) whether messages in “private” Facebook groups are discoverable. |
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| Consumer Bankruptcy Committee Leadership for 2021 |
| The Consumer Bankruptcy Committee is proud to announce our new leaders for 2021!
You can also visit the committee's homepage for more newsletter articles, relevant recordings and other committee information.
The committee is always eager to welcome new volunteers. Please contact any member of our leadership team to find out how you can get involved.
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Jeffrey S. Fraser
Communications Manager
Albertelli Law
Lake Worth, Fla. |
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Hannah White Hutman
Membership Relations Director
Hoover Penrod PLC
Harrisonburg, Va. |
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