Bankruptcy Court Determines that a Commercial Bar Loan is Dischargeable

The debtor, Lesley Campbell (“Campbell”), filed an adversary proceeding to obtain a determination that funds she borrowed under a CitiAssist Bar Exam Loan in April 2009 is dischargeable. Campbell was a student at Pace University Law School. Citibank, N.A. and The Student Loan Corporation (“Defendants”) sought dismissal. On March 24, 2016, Judge Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York in Campbell v. Citibank, N.A. et al, Adv. Pro. No. 15-01038-CEC denied the Defendants Motion to Dismiss Lesley Campbell adversary proceeding and determine seeking a determination that funds she borrowed under a CitiAssist Bar Exam Loan is dischargeable. Read More…

United States Supreme Court Reverses the 11th Circuit Denying Strip Off For Underwater Junior Mortgage Liens in Chapter 7 Bankruptcies

On June 1, 2015, the United States Supreme Court in Bank of America v. Caulkett 135 S.Ct. 1995 (2015) reversed the Court of Appeals for the Eleventh Circuit's decisions in two bankruptcy cases, In re David Caulkett and In re Edelmiro Toledo–Cardona. In those cases, the Eleventh Circuit held that "[A] wholly unsecured junior lien...is voidable under section 506(d) [in a chapter 7 bankruptcy]." Each debtor had two mortgage liens on their respective homes, but the amount of the senior mortgage lien was greater than each home's current market value. This made the each bank's junior mortgage liens completely underwater. Read More…

Bankruptcy Court Says A Person Can Have Only One Homestead At A Time

On February 26, 2015, the U.S. Bankruptcy Court for the Western District of Wisconsin sustained a chapter 7 panel trustee’s objection to debtors’ claim of exemptions under Wisconsin’s homestead exemption in two parcels of real estate in In re Minor, Bankruptcy Case No. 14-13002, Feb. 26, 2015. Read More…
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