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THE CONSUMER BANKRUPTCY LETTER
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In This Issue:
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September 15, 2003 / 2,311 Subscribers
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LEGISLATION & REFORM NEWS
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MORGAN KING'S BOOKS ON CD
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KING'S CHAPTER 7 & CHAPTER 13 COMBO
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Recent published bankruptcy opinions of special note . . .
COURT ADOPTS 2-TIERED APPROACH TO EVALUATING REASONABLENESS OF FEES IN CHAPTER 13
In a jurisdiction having fee "guidelines" with a "presumptive baseline," the court would look first for any unusual issues or problems that might justify a higher than usual fee, and if such issues are found, then the reasonableness of the fees charged would be examined under the "lodestar" method.
In re Eliapo __ B.R. __ (9th Cir. BAP 2003)
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5TH CIRCUIT RULES VIOLATIONS OF THE STAY ARE "VOIDABLE," NOT VOID
In a case were the creditor attempted to pursue a claim by going against the debtor's insurance company, the court held that violations of the stay were voidable, not void. This ruling runs counter to the majority rule that violations are void.
In re Coho Resources, Inc. __ F.3d __ (5th Cir 2003)
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SEPARATE CLASSIFICATION OF UNSECURED CLAIM IN CHAPTER 13 IS EVALUATED ON A CASE-BY-CASE BASIS
Where debtor classified a pre-criminal "diversion" debt to be paid in full, while other unsecured claims would be paid 70%, the court held the classification was not an unreasonable one, given the totality of the circumstances.
In re Etheridge, __ B.R. __ (M.D.Ala. 2003)
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IN TAX DISCHARGE CHAPTER 7, THE THREE-YEAR LOOKBACK PERIOD COMMENCES AT THE MOST RECENT DATE THE RETURN WAS DUE, NOT WHEN THE RETURN WAS FILED
Debtor argued that since the tax return had been filed more than three years before the bankruptcy, it satisfied the 3-year rule prescribed at 11 U.S.C. § 507(a)(8)(A)(i). The bankruptcy court observed that the plain language of the Code is clear that this period starts at the due date, not the filing date [comment: the actual filing date of the return is relevant to the 2-year lookback period for date of filing prescribed at 11 U.S.C. § 523(a)(1)(B)].
IN RE REINE, (W.D.Mo. 2003)
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Informed sources whisper in our ear . . .
STILL QUIET ON REFORM FRONT - BUT REFORM BILL "WILL PROBABLY STILL COME UP"
Sources have noted that action in the Senate on the Bankruptcy Reform Act has been quiet recently, due to several factors. These include - the Senate Judiciary Committee is busy with several major issues, including judicial nominations and a fight over reauthorization of the Fair Credit Reporting Act (but that may have been settled ... see next item), and a "general fatigue" with dealing with bankruptcy.
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CONGRESS ENACTS LAW REQUIRING FREE CREDIT REPORTS TO CONSUMERS
The House on Wednesday voted 392-30 to reauthorize the Fair Credit Reporting Act, and along with the legislation to institute uniform credit reporting requirements nationwide.
Under the legislation, all consumers would have the right to a free copy of their credit report annually upon request. Only six states — Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont — now require the nation's three major credit bureaus — Equifax Inc., Experian Information Solutions Inc. and Trans Union — to give consumers free credit reports every year.
At the request of Rep. Barney Frank, Massachusetts Democrat, the House agreed to include regional and national specialized credit bureaus to the list of credit bureaus that would have to provide free credit reports.
The bill also gives consumers "one call for all" protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud-alert blocking.
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