Summary: The Donald Lewis formed Deerfield Mobile Home Park, L.L.C. in 2005, transferring to it 5.355 acres of land which he had owned with his wife, Norean Lewis, as tenants by the entireties since 1978, retaining 1.721 acres, which was … N.C. Ct. of App.: Murray v. Deerfield Mobile Home Park- Statute of Frauds and Tenancy by the Entireties Read More »

Summary: Ms. Hinyub obtained a default judgment against AA Recovery for $5,000 in damages and $4,100 in attorney’s fees and cost. When AA Recovery failed to pay, Ms. Hinyub requested to conduct an examination of the primary officer of AA … W.D.N.C.: Hinyub v. AA Recovery- Examination of Judgment Debtor under N.C.G.S. §1-352 Read More »

Summary: The parties involved in the transaction at issue ha previously agreed to a settlement with a judgment for $200,000 and also a confession of judgment for $446,000. Mr. Pfeifer satisfied the terms of the $200,000 judgement, through proceeds from … Bankr. E.D.N.C.: BRRRT Properties v. Pfeifer- Nondischargeability under §523(a)(2)(a) and (a)(4); Credit for Payments under Judgement Read More »

Summary: Ms. Hollan hired the Kaspers & Associates Law Offices, L.L.C. (“Kaspers”) in 2013 to represent her in an employment discrimination law suit. During that case, Ms. Hollan sold her unecumbered homed in Atlanta, with net proceeds of more than … Bankr. E.D.N.C.: In re Hollan- Denial of Discharge due to Unaccounted Funds Read More »

One unfortunate part of my job is that no one is ever looking forward to speaking with me at first. My clients are invariably...

Congress has made it very difficult to discharge a student loan. However, as illustrated by a recent decision from the Second Circuit, not all obligations owed by students in connection with their schooling are excepted from discharge. Homaidan v. Sallie Mae, Inc., 2021 U.S. App. LEXIS 20934 (2nd Cir. 7/15/21). What Happened Hilal Homaidan attended Emerson College from 2003-2007. He took out two “direct-to-consumer Tuition Answer Loans, totaling $12,567, from Sallie Mae, Inc.” These loans were not made through Emerson’s financial aid office nor, according to Homaidan, were they made solely to cover the cost of attending college. Homaidan filed bankruptcy and received a discharge. Navient hired a collection firm “to pester Homaidan about paying back his Tuition Answer Loans.” Homaidan assumed that if Navient was trying to collect from him, the debt must have been excluded from discharge and he paid back the loans. In 2017, he reopened his case and brought suit against Navient for violation of the discharge. Navient moved to dismiss the adversary proceeding on the basis that the loans were non-dischargeable. Judge Elizabeth Strong denied the motion to dismiss and an interlocutory appeal followed. The Second Circuit affirmed. The Court’s Ruling According to the Second Circuit, there are three types of student obligations which are non-dischargeable: (1) loans and benefit overpayments backed by the government or a nonprofit; (2) obligations to repay funds received as an educational benefit, scholarship, or stipend; and (3) qualified private educational loans. Navient argued that the loans constituted an educational benefit, conceding that neither the first nor the third category applied. Homaidan argued that educational benefits referred to a narrow category of conditional grant payments rather than all private student loans. The Second Circuit found that Navient’s construction tortured the English language. It quoted a Tenth Circuit decision that said that “no normal speaker of English . . . would say that student loans are obligations to repay funds received as an educational benefit.” In re McDaniel, 973 F.2d 1083 (10th Cir. 2020). The Court used the canon of noscitur a sociis, “the canon that counsels that a word is given more precise content by the neighboring words with which it is associated.” 11 U.S.C. Sec. 523(a)(8)(ii) refers to “an obligation to repay fund received as an educational benefit, scholarship, or stipend.” The Court reasoned that “educational benefit” must be similar to scholarship or stipend. It ultimately concluded that: "Educational benefit" is therefore best read to refer to conditional grant payments, similar to scholarships and stipends. The Reserve Officer Training Corps and the National Health Service Corps, for example, pay tuition in exchange for a promise to serve in the military after graduation or to practice medicine in an underserved region. See Jason Iuliano, Student Loan Bankruptcy and the Meaning of Educational Benefit, 93 AM. BANKR. L.J. 277, 292 (2019). A recipient who breaks that promise incurs an "obligation to repay [the] funds" that they previously received "as an educational benefit."    Opinion at *15. Commentary This decision can have far-ranging consequences for Navient and other creditors who sought to collect Tuition Answer Loans after discharge. Attempting to collect, or actually collecting as happened here, is a violation of the discharge. This leaves Navient exposed to damages in this case and similar cases.  Navient had to resort to legal gymnastics because the two main clauses of Sec. 523(a)(8), while quite broad, have very definite meanings. Loans backed by the government or non-profits cannot include private student loans. Private student loans may be non-dischargeable, but only if they are “qualified student loans” under the Internal Revenue Code. That means that any lender which cannot establish one of the main exceptions to dischargeability is left to argue that the debt is an obligation to repay funds received as an educational benefit, scholarship or stipend. As bad as this result, was, future cases may be worse. There is now a developing body of law as to what does not constitute an obligation to repay an educational benefit. In addition to this opinion from the Second Circuit and the Tenth Circuit’s McDaniel decision, the Fifth Circuit ruled against Navient in Crocker v. Navient Solutions, LLC (In re Crocker), 941 F.3d 206 (5thCir. 2019) in a case involving a loan made in connection with a program to study for the bar exam. Given the trend in the law, students with unconventional loan products should be able to expect an easier time establishing that their debt was discharged. Conversely, lenders making arguments that “no normal speaker of English” would make could find themselves in an uncomfortable position.

The Impact of Bankruptcy on Your AZ and Federal Tax Refunds What Happens to Your Tax Refund After Filing For Bankruptcy? You’ve gotten to the point where you’re realizing that bankruptcy is going to be the best way to deal with your overwhelming debt. Yet you know that you have a tax refund coming up, and you’d like to be able to use that money to start getting back on your feet after your debts have taken up all your resources for so long. Will you actually be able to keep your tax refund? Or will the bankruptcy court take your refund to satisfy your creditors? The answer is: It depends. By working with a Tucson bankruptcy attorney, you can understand how the law applies to your specific situation and what you can do to keep more of your tax refund (if possible). However, here’s a general overview of what bankruptcy law allows: Tax Refund by Year under Chapter 7 Bankruptcy A tax refund will be considered disposable income that can be used for paying your creditors. If the tax refund was for the tax year before your bankruptcy filing, the entire refund will be considered part of your estate, which can be ordered to be paid to your creditors. So, if you’re expecting a $5,000 check, all of that will likely go to your creditors before your remaining debts can be discharged. If you are expecting a tax refund for the current tax year, the court will likely prorate the refund according to the income you made up to your bankruptcy filing. So, only part of that check will likely be earmarked for your creditors. You may be able to keep the other part. If you get a refund for the tax year following your bankruptcy filing, you will be able to keep all of that refund. Knowing how tax refunds are handled by the bankruptcy court, you can plan with your Tucson bankruptcy attorney on when to file your bankruptcy. You might wait until you have actually received your tax refund so that you can spend it before you file for bankruptcy. Just be sure you are spending it on allowable things. You cannot spend it on: Repayment of just one debt Large, luxury items Repayment or gifts to family or friends You can spend your tax refund on housing expenses, car payments and repairs, food and clothing, medical care, and education. Talk with your bankruptcy attorney in Tucson if you are unsure about what’s allowable. Tax Refunds under Chapter 13 Bankruptcy A Chapter 13 bankruptcy plan reorganizes your debts and sets up a new payment plan based on your ability to pay. If you receive a tax refund under Chapter 13 bankruptcy, it will be included among your assets, and it will likely be distributed to your creditors. However, a tax refund will not be used to determine your payment plan as it is not consistent income. Deciding voluntarily to apply your tax refund to your Chapter 13 bankruptcy plan can help you pay off your debts faster, so you may want to consider this. However, if you want to keep the refund, you can talk to your bankruptcy attorney in Tucson about applying for an exemption. You will have to file a plan modification, and you will have to specify how much you want to exempt and what you will be spending it on. Some allowable expenses can include: House repairs Car repairs Appliance repair or replacement Unexpected medical costs If the exemption is approved, you will also have to provide receipts for these expenses, as well as other documentation. Tax refunds can be tricky under bankruptcy law, but your Tucson bankruptcy attorney can guide you through each of the possibilities to help you understand how best to handle them. You may also be encouraged to adjust your withholdings so that you don’t end up with a large refund. That way, you can spend more of your money from each paycheck, rather than having a big payout at the end of the year. Your bankruptcy attorney serving Tucson will help you understand the options and the benefits of each. Call An Experienced Tucson Bankruptcy Law Firm Call My AZ Lawyers if you are thinking about filing for bankruptcy because you have become overwhelmed by debt. Our experienced bankruptcy attorneys represent clients in both Chapter 7 bankruptcy and Chapter 13 bankruptcy, and they can help you understand how assets like tax refunds, property, and bank accounts are treated under each so you can make the best plan to meet your goals. Our Tucson bankruptcy lawyers are committed to helping you get the maximum debt relief possible. Call us today to schedule a consultation and learn more.   Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Phoenix Location: 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: (602) 609-7000 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post The Impact of Bankruptcy on Your AZ and Federal Tax Refunds appeared first on My AZ Lawyers.

While several North Carolina bankruptcy courts have asserted that “[n]ot only is there no legislative history for § 1C-1601, In re Ragan, 64 B.R. 384, 387 (Bankr. E.D.N.C. 1986), this may be merely received wisdom that was not actually researched. … North Carolina Exemptions Legislative History Read More »