If you are behind on mortgage payments and foreclosure proceedings have started, you may be at risk of losing your house surprisingly fast.  How you respond and what you do next is vital. Before answering the notice, talk to a lawyer.  There may be mistakes or problems with the notice that you can challenge, but more importantly, you might have options to help you before you even respond to their notice.  What you do next could be the difference between keeping your house and not. For help, call Young, Marr, Mallis & Associates for a free case review with our NJ mortgage foreclosure defense lawyers at (609) 755-3115. Call a Foreclosure Defense Lawyer Before Responding When you initially get a Notice of Intent to Foreclose (NOI), this tells you that the lender is ready to act against you.  It has a limited time for you to reply before they actually file for foreclosure against you.  That quick time limit might make you want to reply and get things over with, but always call a lawyer first. Having an attorney on your side from the beginning can help set you up for challenges and actions that might take some time to put into motion.  If you wait until after your reply, it can be harder to change course. The Process of Replying to Foreclosure Notices There are actually two different notices you will receive, each of which requires some kind of response or action on your part: Notice of Intent to Foreclose Once you are behind on your mortgage payments, usually by 3 months, the lender will send you an NOI.  This notifies you that they are going to foreclose if things don’t turn around. This notice has to include the reasons they want to foreclose, how much you need to pay to get back on track, some information about your current equity in the property, and your options and resources available. Response At this stage, your main options are to… Let them move forward Pay off the debt Come up with a payment plan to get you back on track Request mediation File for bankruptcy, which might pause foreclosures And more. Talk to a lawyer about your options.  If paying a bit extra to get back on track is an option, you may be able to work things out with the mortgage company and avoid foreclosure. You only get 30 days to act before the lender moves on to filing official proceedings. Foreclosure Complaint When a complaint is filed with the Office of Foreclosure, the foreclosure process has officially started.  At this point, you are the actual defendant in court proceedings and should have a lawyer. You can, again, allow the foreclosure to go through, but your better option is to contest the foreclosure if there are problems with the process or if the lender made mistakes in administering your mortgage. You may also be able to file for bankruptcy, pausing any collection and foreclosure efforts. Answer Your legal filing in response is called an answer.  In this document, your NJ mortgage foreclosure defense lawyer will explain any legal arguments against the foreclosure, such as discrimination, improper notice, or mistakes in identifying the proper borrower. You get 35 days to file an answer, so do not delay in calling a lawyer. What Do I Say to the Mortgage Lender? Do not talk to your mortgage lender on your own if they have started the foreclosure process against you.  Always consult with a lawyer about your options first before trying to handle any of these legal processes. If you are going to handle things on your own, do not make any promises you cannot follow through on, or else you might lose out on later opportunities to correct or cure your back payments if the mortgage company stops trusting you. Can I Stop Foreclosure? If you are able to make up the back payments, payment plans are often accepted.  It is typically harder and more expensive for mortgage companies to go through foreclosure than it is to simply give you a couple of extra months to catch up. In any case, mortgage companies are not afraid to go through with foreclosure when they need to, so you should have a lawyer on your side. FA Qs on Responding to Mortgage Foreclosure What is the Foreclosure Process? After you have received a Notice of Intent to Foreclose, you need to respond and make new arrangements, or else face a formal Foreclosure Complaint.  From there, you get time to give an answer, and the case can proceed to hearings and decisions. There are many options you have in the middle to negotiate, file counterclaims, and seek help from an attorney. Can I Stop Foreclosure? If you respond quickly and have a plan in place, foreclosures can often be stopped after a NOI is sent.  If you are unable to financially handle ongoing payments, bankruptcy might also help protect you or delay foreclosures. Sometimes there is no way to stop the process, but you still have rights that need to be protected, and we may be able to force the mortgage company to follow every step of the process while you work up the financial power to get your mortgage back on track. Do I Need a Lawyer? You may be thinking that a lawyer is too expensive if you are in financial trouble and can’t afford your mortgage.  However, foreclosure defense is incredibly important, and getting a lawyer can mean the difference between the mortgage company taking your house and a well-negotiated plan that lets you keep your home moving forward. How Long Do I Have to Answer a Foreclosure Notice? After a Notice of Intent to Foreclose is filed, the lender needs to wait 30 days for your response before they can file the Foreclosure Complaint.  You have 35 days to provide an answer to a Foreclosure Complaint. What Are My Options in Foreclosure? Foreclosure cases often have a lot of options, and what is best for your case will depend on your situation.  You can let them foreclosure or pay off the debt, but options somewhere in between – such as a renegotiated payment plan – are often the best option. Can Bankruptcy Stop Foreclosure? Filing for bankruptcy gives you an automatic stay, which can halt collection attempts against you.  This can typically halt foreclosure in its tracks and give you breathing room on your debt. However, bankruptcy is not appropriate for everyone.  If you are just behind because of temporary issues and will be able to recover, you may be best setting up a payment plan or renegotiating the terms of your mortgage with the help of a lawyer. Call Our NJ Mortgage Foreclosure Defense Lawyers Today For a free case review, call our Trenton, NJ mortgage foreclosure defense lawyers at Young, Marr, Mallis & Associates at (609) 755-3115.

Bankr. W.D.N.C.: In re Joiner – §1111(b) Election Survives Subchapter V Lien Modification Rights Ed Boltz Thu, 10/23/2025 - 17:56 Summary: In In re Joiner, Case No. 25-30396 (Bankr. W.D.N.C. Oct. 2 2025) (Judge Ashley Austin Edwards), the court addressed the intersection between Subchapter V’s debtor-friendly lien modification authority under § 1190(3) and a creditor’s long-standing right under § 1111(b)(2) to elect to have an undersecured claim treated as fully secured. Facts: Joseph and Krista Joiner filed under Subchapter V, personally guaranteeing a $1 million SBA-backed business loan from Pinnacle Bank that was also secured by their Charlotte residence. Pinnacle filed a proof of claim for roughly $1.2 million, asserting a secured portion of $463,768 based on an $805,000 appraisal, after accounting for a senior Truist lien of $341,000. When Pinnacle elected under § 1111(b)(2) to treat its entire claim as secured, the Joiners objected, arguing that § 1190(3) — which allows an individual Subchapter V debtor to modify a lien on a principal residence if the loan proceeds were primarily used for the small business — took precedence and rendered § 1111(b) inapplicable. Pinnacle countered that § 1111(b) applies in all Chapter 11 cases, that § 1181(a) lists the provisions inapplicable to Subchapter V and does not exclude § 1111, and that Congress intended both sections to coexist. Holding: Judge Edwards overruled the debtors’ objection, holding that § 1190(3) does not override a creditor’s right to make a § 1111(b) election. Citing Collier on Bankruptcy and In re VP Williams Trans, LLC, 2020 WL 5806507 (Bankr. S.D.N.Y. Sept. 29 2020), the court emphasized that § 1181(a)’s silence regarding § 1111 indicates Congress meant for the election to remain available in Subchapter V cases. The court also noted that Pinnacle’s loan might not even qualify under § 1190(3), as it appeared secured by more than just the residence. Commentary: This decision marks the first published Western District of North Carolina ruling squarely addressing whether an individual Subchapter V debtor’s new lien-modification power can negate an undersecured creditor’s § 1111(b) rights — and answers “no.” The reasoning mirrors traditional Chapter 11 practice: § 1111(b) protects secured creditors from undervaluation risk by allowing them to receive payments equal to their total claim, while § 1190(3) merely expands which claims a Subchapter V debtor may modify. Judge Edwards viewed the two provisions as co-existing, not conflicting — much as §§ 1123(b)(5) and 1111(b) have co-existed since 1978. Practice Pointer: For Subchapter V debtor’s counsel, this means that even when § 1190(3) allows modification of a lien on a principal residence, an undersecured creditor can still invoke § 1111(b) and require the plan to treat its full claim as secured. That can substantially increase plan payment obligations and alter feasibility calculations. Before proposing a § 1190(3) modification, counsel should: Confirm collateral scope. If the loan is secured by more than the residence, § 1190(3) may not apply at all. Anticipate § 1111(b) elections. Run feasibility models assuming full-claim treatment. Negotiate or value early. Early stipulations or agreed valuations can mitigate post-election surprises. For creditors, Joiner reaffirms that the § 1111(b) election remains a powerful tool—even in the more debtor-friendly confines of Subchapter V. To read a copy of the transcript, please see: Blog comments Attachment Document in_re_joiner.pdf (253.34 KB) Category Western District

W.D.N.C.: Shaf International v. Mohammed – Only the Receiver Can Ride This Motorcycle Ed Boltz Wed, 10/22/2025 - 16:33 Summary: In Shaf International, Inc. v. Mohammed (W.D.N.C. Sept. 22, 2025), Judge Reidinger affirmed the Bankruptcy Court’s grant of summary judgment to the debtor, holding that a single creditor lacks standing to assert fiduciary duty claims against the officer of an insolvent corporation where the injury alleged is common to all creditors. Background: Shaf International sold motorcycle gear to Jafrum International, a company owned and operated by debtor Jaffer Sait Mohammed, who personally guaranteed the corporate debt. When Jafrum collapsed, it sold its inventory to an affiliate of Vance Leathers, a Florida company, for $436,000—satisfying Vance’s $311,000 debt and leaving other creditors, including Shaf, unpaid. Shaf later obtained a $661,239 judgment in New Jersey and then sued Mohammed in an adversary proceeding, alleging “constructive fraud while acting in a fiduciary capacity” and “willful and malicious injury,” asserting that he diverted assets and favored one creditor over others. The Court’s Holding: The District Court agreed with both the Bankruptcy Court and long-settled North Carolina law that fiduciary duties of corporate officers run to the corporation itself, not to individual creditors—unless the injury is “peculiar or personal” to that creditor. Where multiple creditors share the same injury—here, the debtor’s alleged preference for one creditor over the rest—only a receiver, trustee, or derivative action on behalf of all creditors has standing. Shaf’s arguments that its judgment and large claim size made it unique fell flat: the court noted that a judgment creditor is still an unsecured creditor of the same class as others, and “being the largest” does not confer exclusivity. Similarly, Shaf’s claim that the debtor’s post-sale employment with his wife’s company (which later did business with the buyer) was a form of self-dealing failed both factually and legally, as any resulting injury again would have been suffered equally by all creditors. Practice Pointer: This case reaffirms that individual creditors cannot repackage collective injuries into personal claims simply by invoking fiduciary language or alleging bad faith. Where a debtor-officer allegedly strips or favors assets in the wind-down of an insolvent corporation, only a receiver, trustee, or derivative plaintiff acting for all creditors may bring a fiduciary breach or constructive fraud action. For creditor’s counsel, this underscores two key points: Preserve corporate claims early—consider seeking appointment of a receiver or filing an involuntary bankruptcy before assets vanish. Don’t mistake nondischargeability for standing—even if a debt might fit §523(a)(4) or (a)(6), the underlying claim must still be one the creditor can legally bring. And for debtors’ counsel: when closing a business, ensure any payments to insiders or favored creditors are scrupulously documented and defensible—because while individual creditors can’t sue, the trustee (or a vigilant receiver) certainly can. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document shaf_international_v._mohammed.pdf (242.34 KB) Category Western District

E.D.N.C.: Saffold v. First Citizens Bank – Failure to Accurately Report Balance following Settlement can constitute Breach of Settlement, but Compliance with Notice Procedures Required Ed Boltz Tue, 10/21/2025 - 17:52 Summary: In Saffold v. First Citizens Bank (No. 5:24-CV-487-M-RJ, E.D.N.C. Sept. 30, 2025), Chief Judge Myers denied—albeit without prejudice—the bank’s motion to dismiss a Fair Credit Reporting Act (FCRA) claim brought by consumer Amanda Saffold. The dispute arose from a 2020 settlement between Saffold and First Citizens resolving prior collection activity that she alleged violated consumer protection laws. The settlement included mutual releases, a representation by the bank that it would discharge the debt and cease collection, and a clause requiring either party to give 14 days’ written notice before alleging breach. Saffold later discovered that TransUnion continued to report her account as delinquent and disputed the entry, asserting that First Citizens failed to correct its reporting in violation of the FCRA. The bank sought dismissal, arguing the settlement’s release barred the claim and that it had no continuing duty to ensure credit reporting accuracy. The court rejected both substantive defenses. Applying North Carolina contract law, Judge Myers found that Saffold’s promise not to sue was dependent on the bank’s promise to “fully release and forever discharge” her debt. If the bank continued to report a balance, that would breach the agreement and relieve Saffold of her obligation not to pursue further claims. The Court also held that the settlement did more than simply end collection—it extinguished the debt itself, and therefore, continuing to report it as due could violate both the contract and the FCRA. However, Saffold failed to allege that she complied with the agreement’s notice provision. Her dispute through TransUnion did not constitute notice under the contract, which required direct written notice to the bank’s counsel. Because she had not alleged that she sent such notice, her complaint was procedurally deficient. Nonetheless, the court denied the motion to dismiss without prejudice and granted her leave to amend by October 14, 2025, to allege proper notice. Commentary: The Saffold decision is a helpful illustration of how consumer credit reporting disputes often live at the intersection of federal statutory rights and private settlement contracts. Even when a creditor agrees to “discharge” a debt, its obligations may continue through the accuracy duties imposed by the FCRA. Yet, as this case shows, procedural precision still matters—particularly when settlements include notice-and-cure provisions. For consumer and debtor counsel, one practical takeaway is to ensure that settlement agreements explicitly address post-settlement credit reporting duties. Rather than relying on general release language or “cessation of collection” clauses, consider including a clause such as: Credit Reporting Accuracy Provision: Creditor agrees to report to all consumer reporting agencies to which it furnishes information  an update to their records to reflect that the Account has been satisfied, settled in full, or otherwise carries a $0 balance with no past-due status. Creditor shall not report or cause to be reported any derogatory information regarding the Account after the Effective Date of this Agreement. Such a provision transforms the creditor’s obligations from implicit to enforceable, reducing ambiguity about whether continued derogatory reporting constitutes a breach. In sum, Saffold reminds practitioners that settlements resolve disputes only when they are drafted—and followed—with the same care as any other legally binding agreement. A promise to “forever discharge” the debt should also mean a promise to stop saying otherwise to the credit bureaus. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document saffold_v._first_citizens_bank.pdf (180.19 KB) Category Eastern District

M.D.N.C.: Joyce v. First American Mortgage Solutions – Stream of Consciousness Meets the FCRA and Mortgage Reports Ed Boltz Mon, 10/20/2025 - 18:37 Summary: Judge Schroeder’s September 30, 2025 portrait of  the property report as a  CRA  in Joyce v. First American Mortgage Solutions, LLC (No. 1:23-cv-1069) denied the defendant’s motion for judgment on the pleadings, allowing a Fair Credit Reporting Act (“FCRA”) claim to proceed where a “Property Report” combined another consumer’s judgments with the plaintiff’s file and was then used by a lender to deny him a loan. And "yes i said yes I will yes"—perhap because the plaintiff’s name really is James Joyce— while the complaint and claims read a bit like Ulysses: full of detail, meandering through definitions and disclaimers, they were ultimately coherent enough to survive dismissal. Background: Joyce applied for a debt-consolidation loan with Members Credit Union. At the credit union’s request, First American Mortgage Solutions prepared and sold a “Property Report.” The report—supposedly about the borrower’s property—listed judgments against “James Joyce d/b/a AMPM Appliance” and “James F. Joyce,” neither of whom were the plaintiff. The credit union, seeing those supposed debts, denied the application. Joyce sued under 15 U.S.C. §1681e(b), alleging that First American failed to follow “reasonable procedures to assure maximum possible accuracy.” The Court’s Ruling: First American argued that the report wasn’t a “consumer report” because it was about property, not personal creditworthiness, and that its End User License Agreement (EULA) expressly disclaimed any FCRA use. Judge Schroeder wasn’t persuaded. Taking the allegations as true, the court found the complaint plausibly alleged that: The report contained personal information (judgments and liens attributed to “James Joyce”); It was prepared for a lender in direct response to a credit application; and The lender actually used it in deciding to deny credit. The court refused to consider First American’s attached EULA and “title abstract,” holding they were neither integral to nor authenticated within the pleadings. Even if they had been, disclaimers cannot defeat plausible allegations of intent. As Judge Schroeder noted, citing Kidd v. Thomson Reuters Corp., “an entity may not escape regulation as a ‘consumer reporting agency’ by merely disclaiming an intent to furnish ‘consumer reports.’” Commentary: Judge Schroeder stopped short of declaring all property reports “consumer reports,” but left open that possibility depending on how they are used. That uncertainty should prompt both lenders and vendors to revisit their compliance policies. And if the irony of a plaintiff named James Joyce alleging that his credit file was “mixed” isn’t poetic enough—consider this case a reminder that the FCRA, like modernist literature, demands attention to detail. One might even say that this decision brings stream-of-consciousness to the stream of commerce. Practical Implications: Judge Schroeder’s opinion continues the recent Middle District trend (see Keller v. Experian I and II) that focuses on the real-world use of a report, not its label. If a report—whether called a “title search,” “property profile,” or “data supplement”—is used to assess a consumer’s credit eligibility, it may fall under the FCRA. For consumer practitioners, Joyce reminds us that: “Mixed file” errors remain actionable, even when made by secondary data vendors; Mortgage-related data companies can be “consumer reporting agencies” if their reports influence credit decisions; and EUL As and disclaimers can’t contract around statutory duties. For creditors, the takeaway is straightforward: if you use such reports in deciding whether to extend credit, you assume FCRA compliance risk—no matter how the vendor markets it. And while Joyce involved a straightforward consumer loan, its reasoning has implications far beyond. In North Carolina’s Loss Mitigation/Mortgage Modification (LMM) Programs—available in the Eastern, Middle, and Western Bankruptcy Courts—mortgage servicers and their vendors routinely generate “property verification,” “valuation,” or “title update” reports as part of the modification process. If those reports contain personally identifiable credit information (e.g., judgments, liens, prior bankruptcies) and are used to determine a debtor’s eligibility for a modification or short refinance, they could meet the FCRA’s definition of a “consumer report.” The FCRA applies to any “communication of information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, or capacity,” used or expected to be used to determine credit eligibility. 15 U.S.C. §1681a(d)(1). A mortgage modification is an extension of credit. Thus: Servicers that request or rely on such reports in deciding whether to offer modification terms are “using” consumer reports; Vendors that compile and sell those reports to servicers could qualify as “consumer reporting agencies”; and Debtors denied modifications due to inaccurate entries (e.g., misattributed judgments, erroneous liens, or mistaken prior foreclosures) might assert FCRA claims akin to Joyce. Even within bankruptcy, where the LMM process is court-supervised, the fact that servicers use these reports to make credit determinations may implicate the FCRA’s procedural and accuracy requirements—especially when those same reports later form the basis for Rule 3002.1 payment changes, escrow recalculations, or denials of post-petition loss mitigation. With proper attribution,  please share this post.    To read a copy of the transcript, please see: Blog comments Attachment Document joyce_v._first_american_mortgage.pdf (168.17 KB) Category Middle District

Divorce and bankruptcy can be unpleasant, but they may be necessary to help you get a fresh start. They also tend to take a large financial toll, and one may affect the other. Talk to your lawyer about how filing for bankruptcy could impact your assets in a divorce or vice versa. While bankruptcy may help discharge certain debts, many debts related to divorce proceedings may not be discharged. For example, alimony and child support are almost never eligible for discharge through bankruptcy. Equitable distribution payments from dividing assets might be eligible for discharge, but only under certain bankruptcy chapters. Your attorney can help you decide which to file for first and how to protect your assets. To get a free, confidential review of your case from our Pennsylvania bankruptcy lawyers, call Young, Marr, Mallis & Associates at (215) 701-6519. Can Divorce-Related Debts Be Discharged if I File for Bankruptcy? Many debts may be discharged through bankruptcy, but debts related to divorce may be handled differently. Debts That Can Be Discharged? Our Allentown, PA bankruptcy lawyers may help you discharge various debts. Credit cards, unpaid medical bills, personal loans, and even old utility bills may be eligible for discharge. However, you must determine whether these debts are joint debts shared with your spouse. If they are, creditors may still come after your spouse for these debts if they do not also file for bankruptcy. Debts Ineligible for Discharge? Certain debts related to divorce proceedings might not be eligible for discharge, depending on how you file. Debts that the court deems to be domestic support obligations, such as alimony or child support, are almost never eligible for discharge. Debts related to equitable distribution payments when assets are divided in a divorce may be discharged, but only under Chapter 13. How Are Assets Divided in Divorce if Someone Files for Bankruptcy? How assets are divided in a divorce proceeding may be heavily influenced by bankruptcy proceedings and vice versa. Equitable Distribution Payments Equitable distribution payments result from how assets are divided in a divorce. Many states, including Pennsylvania, emphasize dividing assets in the way most equitable for the case. As such, you may owe your spouse money or valuable assets in a divorce. Your equitable distribution payments to your spouse may or may not be eligible for discharge. If you file for Chapter 7 bankruptcy, these debts are almost never eligible for discharge. However, they may be eligible under Chapter 13. Joint Debts If you are jointly liable for debts with your spouse, the debts may be discharged only for the spouse filing for bankruptcy. For example, if you and your spouse are jointly liable for credit card debt, the debt may be discharged for you but not for your spouse, unless they file for bankruptcy with you. In that case, creditors could come after your spouse for the debt, but not you. Should I File for Bankruptcy Before or After Divorce in Pennsylvania? Whether you should file for divorce or bankruptcy first is something you should discuss with your lawyer, as the answer depends on your assets and specific needs. Bankruptcy Before Divorce If assets are liquidated during bankruptcy, they obviously cannot be subject to equitable distribution during divorce. Similarly, bankruptcy proceedings may significantly alter your financial status. Your finances are a key factor in how courts determine support obligations, like alimony. If you have much less financial resources, your support obligation might be reduced. Again, talk to your lawyer about this before making any important decisions. Divorce Before Bankruptcy If you file for divorce before filing for bankruptcy, you may be able to offload certain debts onto your spouse as part of the terms of a divorce settlement. Debts and assets may both be divided as equitably as possible. If debts are assigned to your spouse in the divorce, you may lighten your load when it comes to filing for bankruptcy. This may be a good idea if your spouse is responsible for most of your debt, although you should ask your lawyer first. How Different Bankruptcy Chapters Affect Divorce-Related Debts There is more than one way to file for bankruptcy, and each bankruptcy chapter may have a different impact on divorce-related debts. Chapter 7 Chapter 7 bankruptcy focuses on liquidating assets to pay debts, and any debts left unpaid after everything is liquidated may be discharged if they are eligible. After a divorce, domestic support obligations like child support or alimony are almost never eligible for discharge under Chapter 7. It may also be difficult to liquidate assets you hold jointly with your former spouse. Similarly, equitable distribution payments may not be discharged. Chapter 13 Chapter 13 requires bankruptcy petitioners to develop aggressive payment plans to repay debts over several years. Once the payment plan is complete, remaining debts may be discharged. Like Chapter 7, you cannot discharge domestic support obligations under Chapter 13. However, unlike Chapter 7, debts related to equitable distribution payments may be discharged, depending on your circumstances. FA Qs About How Bankruptcy Affects Divorce-Related Debts in Pennsylvania Can Alimony or Child Support Debts Be Discharged Through Bankruptcy? No. Debts related to domestic support obligations, including alimony and child support, may not be discharged through bankruptcy. After your bankruptcy case is complete, your former spouse may still pursue payment for these debts. What Happens to Joint Debts I Share with a Spouse After Bankruptcy? Since spouses share joint debts, creditors may still go after one spouse for these debts even if they are discharged for the other spouse through bankruptcy. Both spouses would need to file for bankruptcy together to have these debts completely wiped out. Does Bankruptcy Affect Equitable Distribution of Assets During Divorce? Yes, but only if you file for Chapter 7 bankruptcy. Under Chapter 13, equitable distribution payments may be discharged. However, they may not be discharged through Chapter 7. Should I File for Divorce or Bankruptcy First? Your filing may vary based on your assets and your spouse’s cooperation. In some cases, it may be better to coordinate a divorce and divide assets before filing for bankruptcy. In others, someone might want to file for bankruptcy and wipe out certain debts before filing for divorce. What Should I Do if I File for Bankruptcy and a Divorce? Speak to your attorney about how to coordinate your finances so that you can afford both the divorce and bankruptcy proceedings. Bankruptcy may reduce your disposable income, making it much harder to afford certain divorce debts. A divorce court may be willing to alter the terms of your support obligations, considering your changed financial status. Which Bankruptcy Chapter Should I File Under if I am Also Getting Divorced? If you have divorce-related debts you want discharged, Chapter 13 could help you, depending on the nature of those debts. Under Chapter 7, most divorce-related debts are ineligible for discharge, although you should speak to your attorney about this first. Contact Our Pennsylvania Bankruptcy Attorneys for Assistance Now To get a free, confidential review of your case from our Berks County, PA bankruptcy lawyers, call Young, Marr, Mallis & Associates at (215) 701-6519.

M.D.N.C.: Keller v. Experian II – No Standing to Sue, Even for a “Suspicious Mail Policy” Delay Ed Boltz Fri, 10/17/2025 - 16:38 Summary: In this sequel to Keller v. Experian I, 2024 WL 1349607 (M.D.N.C. Mar. 30, 2024), Judge Thomas Schroeder once again dismissed Eric Keller’s Fair Credit Reporting Act (FCRA) suit against Experian—this time for lack of Article III standing rather than for failure to state a claim. Background Keller’s saga began when a refinancing snafu between Truist and TD Auto Finance led to erroneous late payment reporting on his car loan. After Experian flagged Keller’s initial dispute letter as “suspicious mail,” it delayed forwarding the dispute to Truist. Once Experian eventually did so, Truist confirmed—incorrectly—that the loan was delinquent. In Keller I, Judge Loretta Biggs held that this was a legal dispute, not a factual one, and thus outside Experian’s reinvestigation duties under 15 U.S.C. §1681i. She dismissed Keller’s individual FCRA claims, leaving only a putative class action claim challenging Experian’s “suspicious mail policy.” Keller II: The Standing Showdown Experian next argued that Keller lacked Article III standing because his alleged injury—a delay in processing his dispute—was not “fairly traceable” to any inaccuracy in his credit file. Judge Schroeder agreed. While Keller alleged he was denied a mortgage loan due to Experian’s inaction, the court found that the delay itself did not cause that injury. Even if Experian had promptly acted, Truist would have repeated its same erroneous report, and Keller’s credit file would have remained unchanged. The harm flowed from Truist’s records, not from Experian’s temporary hesitation. The court also noted Keller could have directly disputed the information with Truist under 12 C.F.R. §1022.43, further breaking the causal chain. The court thus found no injury “fairly traceable” to Experian—and therefore no standing. Amendment Futility Keller’s proposed Second Amended Complaint alleged multiple duplicative tradelines and data conflicts within Experian’s report. Judge Schroeder was unmoved, finding these allegations simply restated the same underlying dispute with Truist—still a legal disagreement, not a factual inaccuracy a CRA could resolve. The amendment would be futile. Class Action Dismissal Because a named plaintiff without standing cannot represent a class, the entire case was dismissed without prejudice. The court declined to allow substitution of another representative since no class had been certified and no other injured party had been identified. Commentary Keller II closes the loop on a dispute that began with Experian’s overzealous fraud-screening policy. Where Keller I held that Experian wasn’t responsible for resolving legal disputes between borrower and lender, Keller II finds that even if Experian’s internal procedures delayed a reinvestigation, no actionable injury resulted. This decision exemplifies how, post-TransUnion v. Ramirez and Spokeo, courts in the Fourth Circuit continue to demand a concrete and traceable injury—not just a statutory violation or procedural misstep—before FCRA plaintiffs can proceed. For consumer attorneys, Keller II reinforces two key lessons: Causation matters—even procedural delays or CRA negligence require a clear factual link to a real-world credit denial. Parallel disputes with furnishers should be pursued directly and promptly under §1022.43, especially when the CRA’s role is limited. And for CR As, Keller II provides further validation that their “suspicious mail” safeguards, though frustrating to consumers, are unlikely to result in standing-worthy claims absent concrete harm. See prior coverage: M.D.N.C.: Keller v. Experian I – Reinvestigation Duties Limited to Factual, Not Legal Disputes (July 15, 2024). With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document keller_v._experian_ii.pdf (153.67 KB) Category Middle District

M.D.N.C.: Atkinson v. Coats II – “Breach of the Peace” in Repossession Requires More Than a Deputy’s Quiet Presence Ed Boltz Thu, 10/16/2025 - 17:43 Summary: When a repossession turns into a shouting match—or worse, when the debtor is still inside the car—any lawyer who’s ever seen the phrase “without breach of the peace” in N.C. Gen. Stat. § 25-9-609 should immediately start thinking “state-court claim and delivery,” not “self-help.” In Atkinson v. Coats II, No. 1:22-cv-369 (M.D.N.C. Sept. 23 2025), Judge Osteen followed the Fourth Circuit’s earlier decision in Atkinson v. Godfrey, 100 F.4th 498 (4th Cir. 2024), and dismissed the remaining claims against the Harnett County Sheriff, finding no Monell liability for the deputy’s role in a contentious repossession. The tow operator had called the sheriff’s office for “assistance” after lifting the debtor’s vehicle—with her still inside—off the ground. A deputy arrived, ordered her out, and the repo was completed. The debtor alleged that the sheriff’s office had a policy of aiding creditors in self-help repossessions. No Clear Constitutional Violation, No Policy Liability The Fourth Circuit had already held that the deputy was entitled to qualified immunity because neither North Carolina nor federal precedent clearly established that his conduct—ordering the debtor from the car—was unconstitutional. Judge Osteen reasoned that if the constitutional “terrain was murky,” there could be no notice to the Sheriff sufficient to support municipal liability. The plaintiff’s claims that Harnett County had a “policy” of helping repossessors were conclusory, based only on this single incident and “information and belief.” Without multiple examples or evidence of an official directive, there was no “express policy,” “custom,” or “deliberate indifference” sufficient to meet Monell’s standards. Why This Matters for Consumer Counsel While Atkinson II ultimately shields the sheriff’s office from federal § 1983 liability, it leaves open a key state-law issue: repossession “without breach of the peace.” Under U.C.C. § 9-609 and North Carolina’s enactment, self-help repossession is permissible only so long as it does not breach the peace. That standard is a factual, state-law inquiry—and when an officer’s presence or command compels a debtor’s compliance, the line from “peacekeeping” to “state-sanctioned seizure” may be crossed. Consumer debtor attorneys should therefore remind creditor counsel—particularly those representing buy-here-pay-here dealers and third-party repossessors—that bankruptcy “surrender” does not itself authorize self-help repossession. If the debtor refuses access or remains in possession, the creditor’s lawful course is a claim-and-delivery action under N.C. Gen. Stat. § 1-472 et seq., not a midnight tow backed by a deputy’s badge. Attempting repossession in those circumstances risks both tort and UDTPA exposure, as well as possible contempt in bankruptcy court if the vehicle remains property of the estate. Practice Pointer Advise creditors: even post-bankruptcy, obtain judicial process before repossessing over objection. Advise debtors: document any law-enforcement involvement, as the presence of an officer often transforms a private dispute into state action. Advise law enforcement: “civil standby” should never become “civil participation.” In short, Atkinson v. Coats II narrows federal liability but reminds everyone else—especially those holding tow straps and titles—that repossession power ends where the peace begins. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document atkinson_v._coats_ii.pdf (191.87 KB) Category Middle District

N.C. Ct. App.: Pelc v. Pham – Contempt Vacated; Execution, Not Incarceration, Required for Enforcement of Money Judgment Ed Boltz Wed, 10/15/2025 - 20:17 Summary: In Pelc v. Pham (No. COA25-27, filed Oct. 15, 2025), the North Carolina Court of Appeals (Tyson, J.) vacated a Mecklenburg County contempt order imprisoning a former spouse for failure to pay a contractual debt arising from a Form I-864 “Affidavit of Support” and related loan. The appellate court held that the trial court lacked jurisdiction to use contempt powers to enforce a money judgment grounded in breach of contract. The Court reaffirmed the longstanding principle that monetary judgments must be enforced through execution proceedings under N.C. Gen. Stat. § 1-302, not contempt. The Court also noted that the debtor had properly filed a Motion to Claim Exempt Property under N.C. Gen. Stat. §§ 1C-1601 and -1603, which the trial court erroneously disregarded when assessing his “ability to pay.” After years of litigation between the parties—whose disputes began over financial obligations from a failed international marriage and immigration sponsorship—the district court had ordered payment of damages for breach of the Affidavit of Support and unjust enrichment. When the defendant failed to pay, the court imprisoned him for civil contempt. The Court of Appeals found this improper, vacating the order and remanding with instruction that the creditor may instead proceed by execution, “subject to Defendant’s statutory and lawful exemptions.” Commentary: This decision stands out as a rare example of the North Carolina appellate courts interpreting and applying the state’s exemption procedures under N.C. Gen. Stat. § 1C-1601, particularly in the context of enforcing a civil judgment outside of bankruptcy or domestic-support enforcement. The Court’s holding underscores the sharp statutory distinction between (1) support obligations enforceable by contempt (e.g., child support under § 50-13.4(f)) and (2) contractual or quasi-contractual debts, which must proceed through execution and respect debtor exemptions. Judge Tyson’s opinion reinforces both the jurisdictional limits of the contempt power and the policy underlying the North Carolina Exemptions Act—to preserve a debtor’s basic means of living and prevent imprisonment for debt. The trial court’s refusal to honor Pelc’s claimed exemptions (including his residence and Australian retirement account) improperly blurred the line between contempt and execution, essentially transforming a civil money judgment into an imprisonable offense. In practical terms, this opinion reminds creditors (and domestic attorneys dealing with Affidavit-of-Support claims or other contractual obligations) that execution—not contempt—is the lawful enforcement mechanism, and that exemption procedures under §§ 1C-1601 et seq. must be afforded full effect. For consumer and bankruptcy practitioners, Pelc v. Pham also offers an instructive illustration of how North Carolina exemption law continues to operate outside of bankruptcy proceedings—rare appellate guidance in a state where exemption jurisprudence is more often developed in the bankruptcy courts than in the North Carolina appellate courts. Additionally worth noting is that based on the Form I-864 “Affidavit of Support” and unjust enrichment / loan repayment,  this debt would   likely be dischargeable in bankruptcy, though with nuances depending on how it’s characterized and which chapter is used.   With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document plec_v._pham.pdf (149.57 KB) Category NC Court of Appeals

M.D.N.C.: Scott v. Full House Marketing — No “Bad Faith” in FCRA Claim, Even After Jury Loss Ed Boltz Wed, 10/15/2025 - 18:40 Summary: In Scott v. Full House Marketing, Inc., No. 1:21-cv-242 (M.D.N.C. Sept. 30, 2025), Judge William Osteen, Jr. denied the defendant’s motion for attorneys’ fees and costs after a jury verdict in its favor on claims under the Fair Credit Reporting Act (FCRA). Full House Marketing argued that both the plaintiff, Derrick Scott, and his counsel acted in “bad faith” by pursuing a baseless claim and prolonging litigation unnecessarily. The court disagreed, holding that neither 15 U.S.C. § 1681n(c) nor 28 U.S.C. § 1927 justified a fee award. Scott had sued Full House Marketing and its background-check vendor, Resolve Partners, alleging that he was denied employment based on an inaccurate consumer report that confused him with another person. Although the jury found for Full House on the negligence claim, it found against Resolve. After the verdict, Full House sought sanctions and fees, asserting that Scott had fabricated portions of his résumé and continued litigating after evidence undermined his case. Judge Osteen found that the FCRA’s bad-faith fee provision requires proof of subjective bad faith at the time of filing — not merely that the claims later failed. He emphasized that earlier rulings denying Rule 11 sanctions and summary judgment already established that Scott’s claims had “some factual basis.” Likewise, § 1927 sanctions against counsel were inappropriate, since overestimating a case’s strength or rejecting settlement offers is not “unreasonable and vexatious” conduct. As the court concluded, “[a] mistake in judgment does not amount to bad faith.” Commentary: This decision offers a measured reaffirmation of the high bar for fee-shifting under both the FCRA and § 1927 — a bar that remains especially relevant in consumer litigation where plaintiffs’ counsel often press close factual questions against corporate defendants. The court’s refusal to equate loss at trial with bad faith in filing stands as an important guardrail against chilling legitimate, if ultimately unsuccessful, FCRA claims. For consumer  practitioners, Scott reinforces two parallel themes familiar from dischargeability and fee-reasonableness disputes: Objective weakness ≠ subjective bad faith. Just as an unsuccessful § 523(a)(2) complaint does not automatically trigger § 523(d) fees, a losing FCRA claim is not “bad faith” merely because a jury disagreed. The focus remains on the filer’s mental state at filing — a distinction crucial when creditors attempt to penalize debtors or their counsel for asserting rights under the FCRA, FDCPA, or RESPA. Counsel’s persistence is not misconduct. Judge Osteen’s observation that “a mistake in judgment does not amount to bad faith” could easily apply to debtors’ attorneys who litigate plan confirmation or stay-violation claims that later fail. Zealous advocacy and aggressive strategy — even when frustrating to the other side — are not sanctionable absent genuine vexatiousness or dishonesty. In sum, Scott v. Full House Marketing tempers the reflexive urge to punish consumer plaintiffs after a defense verdict, reminding courts that losing a close case is not the same as filing a frivolous one. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document scott_v._full_house_marketing.pdf (170.83 KB) Category Middle District