N.C. Ct. App.: Frazier v. TitleMax of Virginia, Inc. — North Carolina Courts Continue Rejecting TitleMax’s Efforts to Escape Liability Through Arbitration and Choice-of-Law Clauses Ed Boltz Mon, 05/18/2026 - 17:36 Summary: In a trio of unpublished but significant decisions, the North Carolina Court of Appeals affirmed arbitration awards against TitleMax arising from high-interest cross-border vehicle title loans made to North Carolina residents. The primary decision, Frazier v. TitleMax of Virginia, Inc., was accompanied by the companion cases of Jefferies v. TitleMax of South Carolina, Inc. and Hood v. TitleMax of Virginia, Inc., both of which simply followed the reasoning in Frazier. The facts are by now familiar. North Carolina borrowers crossed into Virginia or South Carolina to obtain title loans carrying staggering interest rates—143%, 179%, 190%, even over 204% annually. TitleMax then perfected liens through the North Carolina DMV, repossessed vehicles in North Carolina, solicited business here, and otherwise conducted extensive operations directed at North Carolina consumers. The borrowers sued under the North Carolina Consumer Finance Act, North Carolina usury laws, and the UDTPA. The matters were removed to federal court, compelled to arbitration under JAMS provisions, and the borrowers prevailed in arbitration. TitleMax then attempted to vacate those awards, arguing that the arbitrators exceeded their authority by applying North Carolina law despite contractual provisions stating that Virginia or South Carolina law governed the loans. The Court of Appeals rejected those arguments across the board. The Core Holding: Arbitrators Can Interpret the Scope of Choice-of-Law Clauses The Court emphasized the extremely limited review permitted under the Federal Arbitration Act. Errors of law—even serious ones—generally do not justify vacating an arbitration award. Relying heavily on Buckeye Check Cashing, Inc. v. Cardegna and Oxford Health Plans LLC v. Sutter, the Court held that the arbitrators did exactly what arbitrators are supposed to do: interpret the contracts and determine whether the generic choice-of-law clauses actually governed the borrowers’ statutory and tort claims. That distinction mattered enormously. The Court noted that these were generic clauses merely stating that Virginia or South Carolina law “governs this Note,” rather than expansive provisions purporting to govern “any and all claims arising out of or relating to” the agreements. Because courts across the country are divided regarding whether generic choice-of-law clauses apply to extra-contractual statutory claims, the arbitrators were at least “arguably construing” the contracts when they concluded that North Carolina consumer-protection law still applied. And under the FAA, that is enough. Importantly, the Court repeatedly emphasized that the question was not whether the arbitrators were correct, but merely whether they were interpreting the contracts at all. That low bar doomed TitleMax’s vacatur arguments. North Carolina Contacts Continue to Matter The opinion also continues a growing line of North Carolina cases recognizing that these “cross-border” title-loan operations are not truly out-of-state transactions at all. TitleMax recorded over 50,000 liens with the North Carolina DMV, charged North Carolina consumers lien fees, repossessed vehicles in North Carolina, solicited North Carolina borrowers, and conducted substantial collection and servicing activity here. That fits squarely with the trend discussed previously in: Ray v. TitleMax of Virginia- TitleMax’s Cross-Border Title Loans Create Personal Jurisdiction in North Carolina Similarly, these decisions continue the long-running fights over arbitration and federal jurisdiction involving TitleMax that were discussed in: White v. Title Max- Federal Arbitration Act alone does not provide federal jurisdiction” And they further reinforce the broader evidence that prohibited title lending frequently continues despite state-law restrictions, as explored in: Center for Responsible Lending- Under the Radar: Evidence of Prohibited Vehicle-Title Loans Made in 23 States Could Arbitration Actually Benefit Consumers in Bankruptcy? These decisions also raise a more provocative question for bankruptcy practitioners: should consumer debtors sometimes affirmatively invoke arbitration themselves? Consumer attorneys—and bankruptcy judges—often reflexively view mandatory arbitration clauses as inherently anti-consumer. Certainly, many creditors inserted arbitration provisions believing they would obtain a more favorable forum, avoid juries, reduce publicity, and increase procedural pressure on debtors. But the TitleMax litigation demonstrates that arbitration does not always function as the creditor-friendly paradise lenders may have anticipated. Here, TitleMax successfully forced the disputes into arbitration, only to suffer substantial consumer awards that proved extraordinarily difficult to overturn because of the FAA’s deferential standards. Once the arbitration clause was invoked, the creditor effectively became trapped by the same arbitration doctrines it sought to weaponize. That dynamic may have important implications in bankruptcy cases involving disputed claims. Where a loan agreement permits either party to demand arbitration, consumer debtors might consider whether certain claim objections, lien disputes, or state-law lender-liability claims should themselves be referred to arbitration rather than remaining exclusively before the bankruptcy court. That is particularly true in situations where debtors fear they may face a hostile reception from certain bankruptcy judges on aggressive consumer-protection arguments involving usury, title lending, UDTPA claims, servicing abuses, or fee disputes. An arbitrator may not necessarily be more pro-consumer—but neither is arbitration inherently pro-creditor. And the economics matter. Large institutional creditors often bear most of the arbitration costs under consumer arbitration rules, especially in JAMS or AAA proceedings. Those filing fees, arbitrator compensation costs, hearing expenses, and attorney time can escalate rapidly. For creditors accustomed to inexpensive claims administration through bankruptcy proofs of claim, arbitration may suddenly transform a relatively small disputed debt into an expensive litigation problem. That cost pressure alone may encourage meaningful settlement discussions. A Chapter 13 debtor objecting to a questionable $6,000 title-loan claim or challenging mortgage fees under Rule 3002.1 might have little leverage in ordinary contested-matter practice. But if the dispute is shifted into arbitration—with the creditor paying thousands in forum costs while facing limited appellate review—the leverage calculus changes dramatically. Indeed, these TitleMax cases illustrate a broader irony: creditors spent years building arbitration systems designed to constrain consumer litigation, but in some circumstances those same systems may now provide consumers with an alternative forum that is less procedurally hostile, more expensive for creditors to defend, and insulated from extensive judicial second-guessing. For bankruptcy practitioners, that possibility deserves far more strategic consideration than it has traditionally received. Bankruptcy Implications: Should Trustees Be Challenging These Liens? These cases also raise a serious question for consumer bankruptcy practice: should Chapter 13 Trustees and Chapter 7 Trustees be routinely objecting to the validity and enforceability of these title-loan liens? If North Carolina law applies—and if these loans violate the Consumer Finance Act, usury laws, or the UDTPA—then the liens themselves may be vulnerable to challenge. That matters enormously in bankruptcy. For Chapter 13 debtors, stripping away or subordinating these title-loan claims could dramatically improve feasibility and reduce plan burdens. Many title-loan payments exceed what debtors pay on mortgages. Eliminating or reducing those claims could be the difference between confirmation and dismissal. For Chapter 7 Trustees, invalidating a TitleMax lien could create non-exempt equity available for unsecured creditors. Even where there is no equity, avoiding improperly perfected or unenforceable liens helps preserve the integrity of the bankruptcy process and prevents unlawful creditors from receiving distributions based on defective claims. And beyond the dollars involved, there is a systemic issue. Bankruptcy courts are courts of equity charged with enforcing both federal bankruptcy law and applicable state-law rights. Allowing creditors to evade North Carolina’s lending protections simply by placing storefronts a few miles across state lines would undermine both state consumer protections and the integrity of the bankruptcy system itself. These decisions suggest North Carolina appellate courts are increasingly unwilling to tolerate that sort of end-run around state law. Finally, congratulations to Drew Brown, James Faucher, and Kevin Rust for continuing to push these important consumer-protection cases forward on behalf of North Carolina borrowers. To read a copy of the transcript, please see: Blog comments Attachment Document hood_v._titlemax_of_va._inc.pdf (80.81 KB) Document frazier_v._titlemax_of_va._inc.pdf (185.11 KB) Document jefferies_v._titlemax_of_s._carolina_inc.pdf (80.26 KB) Category Law Reviews & Studies

N.C. Ct. of Appeals: Myers v. Smoky Mountain Country Club Property Owners’ Association — Bankruptcy Confirmation Orders Still Matter, Even When the “Debtor” Is the POA Ed Boltz Tue, 05/19/2026 - 15:52 Summary: In a pair of unpublished but fascinating decisions, the North Carolina Court of Appeals once again returned to the seemingly never-ending Smoky Mountain Country Club litigation saga, this time reversing a trial court that had attempted to relieve homeowners from paying assessments arising out of a Chapter 11 plan confirmed in the bankruptcy case of the property owners’ association itself. The core dispute arose after the Smoky Mountain Country Club Property Owners’ Association (“POA”) suffered a massive judgment exceeding $7 million relating to clubhouse dues obligations. The POA then filed Chapter 11 bankruptcy and confirmed a plan requiring the collection of assessments from property owners to fund payments under that plan. Homeowners Robinson and Elizabeth Myers refused to pay the assessments and challenged both the enforceability of the clubhouse dues and the POA’s ability to collect them. The trial court agreed with the homeowners, ruling that the clubhouse dues were not valid and that the homeowners were not obligated to pay them. The Court of Appeals reversed. Relying heavily on its earlier decision in Conley’s Creek Ltd. Partnership v. Smoky Mountain Country Club Property Owners Association, the Court held that: the Declaration expressly authorized the assessments; the Planned Community Act permitted the POA to assess and collect the dues; the obligations were real covenants running with the land; and the homeowners remained bound by those obligations notwithstanding the bankruptcy plan structure. Importantly, the Court emphasized that the homeowners purchased their properties subject to the Declaration and therefore remained obligated to pay the dues and assessments, even after the obligations became incorporated into the Chapter 11 plan and Confirmation Order. The companion appeal also addressed a series of unusual stay orders entered by the trial court, ultimately dismissing those issues as moot while noting that a trial court cannot stay a party’s statutory right to appeal. This is also another chapter in the long-running Smoky Mountain litigation that previously produced N.C. Ct. of Appeals: Hedgpeth v. SMCC Clubhouse, LLC- State Court Lacks Subject Matter Jurisdiction over matters pending in an Open Bankruptcy Case, where the Court of Appeals recognized the jurisdictional consequences of an active bankruptcy case. Commentary: One of the more intriguing aspects of these cases is that the traditional bankruptcy roles are effectively inverted. Usually, consumer bankruptcy attorneys represent debtors attempting to discharge or restructure obligations imposed by creditors such as homeowners’ associations, mortgage servicers, or collection companies. Here, however, the POA itself became the Chapter 11 debtor, while the homeowners functioned more like creditors or obligors attempting to escape obligations imposed through the confirmed plan. Yet despite those reversed roles, the underlying bankruptcy principle remains familiar: confirmation orders matter. The Court of Appeals repeatedly treated the Chapter 11 Plan and Confirmation Order as binding legal realities, not merely aspirational documents. Once the bankruptcy court confirmed the plan requiring the collection of these assessments, state courts were not free to casually disregard or rewrite those obligations simply because individual homeowners later objected to the underlying assessments. That dynamic has important implications for consumer bankruptcy practice. Consumer debtors frequently confront creditors who attempt to minimize, evade, or reinterpret the effects of bankruptcy orders and confirmed Chapter 13 plans. Mortgage servicers, for example, often argue that bankruptcy somehow strips debtors of protections otherwise available under consumer protection statutes. That is where the Fourth Circuit’s decision in Koontz v. SN Servicing Corp. becomes particularly relevant. In Koontz, the mortgage servicer attempted to argue that because the borrower was in bankruptcy, the Fair Debt Collection Practices Act either did not apply or should apply differently. The Fourth Circuit rejected that effort, recognizing that bankruptcy does not create a law-free zone where otherwise applicable consumer protections disappear. The same conceptual tension appears here, albeit from the opposite direction. The Myers effectively argued that because the obligation became intertwined with the POA’s bankruptcy plan, the assessment obligations somehow lost enforceability or validity. The Court of Appeals rejected that effort just as the Fourth Circuit rejected the servicer’s attempt in Koontz to use bankruptcy as a shield from otherwise applicable law. Bankruptcy changes rights, remedies, and procedures. But it does not magically erase contracts, covenants, or statutory obligations unless the Bankruptcy Code actually authorizes that result. These decisions also illustrate a broader reality that consumer bankruptcy attorneys know well: bankruptcy courts and state courts remain deeply intertwined. Property covenants, foreclosure rights, POA assessments, mortgage obligations, and confirmed bankruptcy plans all intersect. Attempts by either creditors or debtors to isolate one body of law from the other usually end poorly. And perhaps most notably, this litigation continues to demonstrate how extraordinarily durable confirmed bankruptcy plans can become. Whether the debtor is an individual homeowner or a property owners’ association, confirmation orders frequently become the gravitational center around which years of subsequent litigation orbit. To read a copy of the transcript, please see: Blog comments Attachment Document myers_v._smoky_mountain_country_club_prop._owners_assn_inc._ii.pdf (94.76 KB) Document myers_v._smoky_mountain_country_club_prop._owners_assn_inc.pdf (220.61 KB) Category NC Court of Appeals

E.D.N.C.: Frew v. Emortgage Funding- Pro Se Foreclosure Challenge Dismissed Despite TILA Rescission Arguments Ed Boltz Thu, 05/14/2026 - 15:46 Summary: In Frew v. E Mortgage Funding LLC, the Eastern District of North Carolina dismissed a pro se homeowner’s broad challenge to a residential foreclosure proceeding, rejecting claims under TILA, RESPA, FDCPA, RICO, and North Carolina consumer protection law. Ms. Frew argued that she had rescinded her refinance loan under the Truth in Lending Act by mailing a notice of rescission, thereby voiding the foreclosure. The district court acknowledged that under Jesinoski v. Countrywide, a borrower exercises the right to rescind by sending written notice, but emphasized that notice alone does not complete rescission. Under Fourth Circuit precedent, borrowers must still tender—or at least plausibly allege the ability to tender—the loan proceeds back to the lender. The court also held that the Rooker-Feldman doctrine barred federal review of the underlying foreclosure authorization entered by the Harnett County Clerk of Superior Court. Commentary: This result is unlikely to surprise experienced consumer bankruptcy or foreclosure defense attorneys. Rather, the opinion mostly highlights how pro se litigants often misunderstand the limits of consumer protection statutes and internet-driven “magic letter” theories regarding rescission or mortgage invalidation. Importantly, however, while a North Carolina clerk’s order authorizing foreclosure is treated as a final order for many jurisdictional purposes, homeowners still may retain powerful bankruptcy protections. Even after a foreclosure sale occurs, a debtor can generally still file bankruptcy and stop the loss of the home so long as the bankruptcy is filed before expiration of the 10-day upset bid period under North Carolina foreclosure law. That distinction is critical and frequently misunderstood. The case also reflects the practical reality that borrowers proceeding without bankruptcy protection often lose access to many of the tools that Chapter 13 can provide, including the automatic stay, cure of arrears over time, Rule 3002.1 mortgage accounting oversight, and court-supervised loss mitigation opportunities available in North Carolina bankruptcy courts. To read a copy of the transcript, please see: Blog comments Attachment Document frewe_v._emortgage_funding_llc_et_al.pdf (170.06 KB) Category Eastern District

4th Cir.: Rock Spring Plaza II, LLC v. Investors Warranty of America, LLC — The “Maryland Twerk” Fails: You Can’t Fraudulently Dance Away from a 99-Year Lease Ed Boltz Fri, 06/12/2026 - 22:35 The Fourth Circuit’s unpublished decision in Rock Spring Plaza II, LLC v. Investors Warranty of America, LLC is ostensibly a Maryland commercial lease case. But consumer bankruptcy lawyers will recognize a familiar pattern: a financially troubled enterprise attempting to isolate liabilities in a newly created entity, preserve the profitable assets, and leave creditors holding an empty bag. The court affirmed a jury verdict finding that Investors Warranty of America (“IWA”) improperly assigned a 99-year ground lease to a newly formed LLC, Rock Springs Drive (“RSD”), as part of a plan designed to escape future lease obligations while shielding itself from liability. The jury found the assignment invalid, determined that RSD was merely IWA’s alter ego, and concluded that the transaction constituted a fraudulent conveyance under Maryland law. What Happened? IWA acquired a leasehold interest in a Bethesda office property after foreclosing on the original tenant's leasehold. Unfortunately for IWA, the lease was a financial disaster. Rent exceeded market rates and increased annually, while Bethesda office rents were trending downward. Internal communications described the lease as “worthless” and openly discussed finding an “exit strategy” to get it “off the books.” The solution developed by consultants and counsel was elegant in its simplicity: Create a new single-purpose LLC (RSD). Assign the lease to RSD. Capitalize RSD with only enough money to survive a few years. Prevent meaningful communications with the landlord. Wait until Maryland’s fraudulent conveyance limitations period expired. Dissolve RSD and hand the keys back to the landlord. The Fourth Circuit noted evidence that the structure was deliberately designed to run out the statute of limitations before the landlord discovered the true nature of the arrangement. RSD was prohibited from contacting the landlord without approval, was entirely dependent upon IWA for funding, and could be dissolved at IWA’s whim. The jury was not impressed. Nor was the Fourth Circuit. Why the Assignment Failed The Estoppel Agreement allowed IWA to assign the lease to a "third party" that assumed all lease obligations. The court held that RSD was neither. First, RSD was not truly a "third party." IWA owned 98% of it, controlled its operations, controlled its finances, could dissolve it at any time, and retained veto power over major decisions. The court concluded that dealing with RSD was effectively dealing with IWA itself. Second, RSD could not possibly "assume" all obligations under a lease running through 2089 because its governing documents required dissolution years before then. A company guaranteed to disappear could not meaningfully assume obligations extending decades into the future. The assignment therefore violated the parties' agreements. Fraudulent Conveyance and Alter Ego Findings The court had little difficulty affirming the fraudulent conveyance verdict. Maryland's fraudulent conveyance statute broadly applies to assignments of property interests and obligations made with intent to hinder, delay, or defraud creditors. The landlord qualified as a creditor because it possessed contractual rights to future rent payments. The evidence supporting fraudulent intent included: Internal emails discussing an "exit strategy." Discussions about how to "walk away" from future obligations. Creation of RSD only days before the assignment. Capitalization sufficient for only a limited period. Restrictions on communications with the landlord. A dissolution structure timed suspiciously close to limitations periods. The alter ego finding was equally straightforward. RSD had no meaningful independence. It existed largely as a shell through which IWA hoped to shed liability while retaining control. Under Maryland law, that was enough for veil piercing. Commentary For bankruptcy lawyers, this case feels remarkably familiar. The opinion reads like a judicial autopsy of a liability-management transaction. The facts differ, but the strategy echoes two trends we have been watching for years. The Texas Two-Step The most obvious comparison is the so-called "Texas Two-Step," where companies divide assets and liabilities between entities, placing tort liabilities into one company while preserving valuable assets elsewhere. Courts and creditors have increasingly scrutinized those transactions as efforts to manipulate corporate separateness while avoiding responsibility. The Fourth Circuit never mentions the Texas Two-Step, but the underlying concern is identical: can a company use entity structuring to keep the benefits while shedding the burdens? The answer here was no. North Carolina Receiverships The case also resembles some of the more aggressive uses of the North Carolina Receivership Act. Receiverships can be valuable tools when used legitimately to preserve assets and maximize value. But they also can be used strategically to place distressed assets into a controlled structure that limits creditor remedies, delays collection efforts, and creates procedural obstacles for creditors attempting to reach the real decision-makers. As in Rock Spring Plaza, the practical question is often not whether a separate legal entity technically exists. The real question is whether the new structure has any genuine economic independence or whether it is simply a liability sponge created to absorb losses before being discarded. The Fourth Circuit looked beyond the paperwork and focused on economic reality. That approach should sound familiar to bankruptcy practitioners, who routinely encounter shell entities, insider transfers, nominee arrangements, and other efforts to separate assets from liabilities without separating control. The "ASS"-ignment and the Maryland Twerk The opinion repeatedly refers to the lease assignment. But perhaps "assignment" is too charitable a description. What occurred here was not a conventional transfer to an independent third party willing and able to perform the lease. Instead, the evidence suggested a transfer to a captive entity that was expected to fail after serving its purpose. The Texas Two-Step already has a catchy label. Perhaps Maryland deserves one too. If the Texas Two-Step is a corporate sidestep around liability, this transaction might fairly be called the "Maryland Twerk"—an attempted maneuver in which a company tries to shake loose unwanted obligations by transferring them to a controlled shell entity while hoping creditors are distracted long enough for the music to stop. The Fourth Circuit's response was essentially: Nice dance move. You're still on the hook. And that may be the broader significance of this case. Whether the structure is called a divisional merger, a receivership strategy, a special-purpose entity, or an "ASS"-ignment, courts remain willing to look beyond formalities when the evidence shows that the transaction's real purpose was to hinder, delay, or escape creditors. For bankruptcy lawyers, that is a lesson worth remembering. Fraudulent transfer law, alter ego doctrine, and equitable remedies continue to exist precisely because courts understand that sophisticated liability-avoidance schemes often look perfectly legitimate on paper. Until someone reads the emails. To read a copy of the transcript, please see: Blog comments Attachment Document rock_spring_plaza_ii_llc_v._investors_warranty_of_america_llc.pdf (242.16 KB) Category 4th Circuit Court of Appeals

Filing for bankruptcy can help people with severe debt and financial problems get a fresh start, but they may lose some assets in the process. If you receive unemployment benefits, you should speak to a bankruptcy lawyer about how to protect those benefits. Generally, unemployment benefits and other forms of public assistance may be shielded from the bankruptcy process under exemptions for unemployment and other listed benefits. You must claim the right exemptions when you file your bankruptcy petition. These exemptions may be available through the state or federal government, and you must choose from one or the other. In the meantime, your benefits will likely be considered income for bankruptcy purposes and may be used for things like a means test or payment plans. Ask our Pennsylvania bankruptcy attorneys for a free legal review when you call Young, Marr, Mallis & Associates at (215) 701-6519. Can You Exempt Unemployment Benefits from Bankruptcy in Pennsylvania? You may protect your unemployment benefits through exemptions. You must select the exemptions you wish to claim carefully, as you may only choose federal or state exemptions, not both. Pennsylvania State Bankruptcy Exemptions Pennsylvania offers numerous bankruptcy exemptions, including exemptions for benefits or assistance you receive from the government. This includes unemployment benefits. However, these protections are weaker than federal exemptions and might not protect benefits that have already been mixed with other financial accounts. In Pennsylvania, state bankruptcy exemptions allow you to fully exempt public benefits and government assistance. This means you may fully exempt your unemployment benefits from the bankruptcy process. Federal Bankruptcy Exemptions Like state bankruptcy exemptions, federal exemptions allow you to fully protect public assistance and government benefits from the bankruptcy process. The difference is that if you claim federal exemptions, all your other exemptions must be federal. You are not permitted to pick some exemptions from the state and some from the federal government. Even so, federal exemptions tend to be higher and stronger than Pennsylvania exemptions across the board. As such, it may be wise to choose federal over state, depending on your circumstances. Unemployment Benefits Overpayments Overpayments are a form of debt, as the government may be trying to recover the benefits it overpaid. This can make protecting your unemployment benefits difficult, as the government may want some of those benefits back when you file for bankruptcy. During the bankruptcy process, debts related to unemployment overpayments may be dischargeable. Our Pennsylvania bankruptcy lawyers can help you exempt your benefits and discharge overpayment debts, so you do not lose any of the benefits you need. How Do Unemployment Benefits Factor Into Bankruptcy? Your unemployment benefits need protection during bankruptcy, but that does not mean they are unimportant in other ways. Your benefits may affect your bankruptcy petition in various ways. Unemployment Benefits as Income A huge part of filing for bankruptcy is determining your income. It is one of the main ways bankruptcy courts determine whether you are even eligible for bankruptcy. Income may flow from many different sources, including unemployment benefits. It is important that we take an accurate accounting of the benefits you have received and will continue to receive throughout the bankruptcy process, as this will largely affect how we report your income. Passing a Means Test Certain forms of bankruptcy require that you pass a means test. This test is primarily used for those filing for Chapter 7 bankruptcy, one of the most selected bankruptcy chapters. Your unemployment benefits are considered part of your income and will be used to calculate your means test. Your income will be compared to the average annual median income of similarly sized households in Pennsylvania. If your income is higher than the state median, we must determine your disposable monthly income by deducting certain expenses from your monthly income. Funding Payment Plans You may file under other bankruptcy chapters, like Chapter 13, even if you do not pass a means test. Instead, Chapter 13 allows you to set up payment plans to take control of your debts and pay them off over several years. How your payment plan is structured will depend on your income. Again, your unemployment benefits are part of your income and will factor into your payment plan. How You Can Protect Your Unemployment Benefits During Bankruptcy While your unemployment benefits should be fully exempt, they might still be at risk under certain circumstances. Keeping Benefits in a Separate Account When unemployment benefits are mixed with other funds, the bankruptcy trustee assigned to your case could argue that the funds have lost their protected status. For example, if you receive unemployment benefits and deposit them in an account you share with a spouse, the trustee may attempt to seize those assets. Double Check Your Exemptions Make sure you are claiming exemptions in a way that maximizes your protections. You may not select federal and state exemptions. You must pick entirely from one category or the other. For example, there is a federal exemption to protect your home during bankruptcy, and whatever you do not use toward a home may be put toward a wildcard exemption. However, there is no state exemption for your home in Pennsylvania. If you want to select the federal homestead exemption, you must make sure all federal exemptions will adequately protect your benefits, as you cannot choose exemptions from both categories. Spending Your Benefits Cautiously Your benefits are protected, but the things you buy with them might not be. For example, you may use your unemployment benefits to continue making payments on a car, but the car is not necessarily protected from bankruptcy, unless you claim a vehicle exemption. Be careful how you spend unemployment benefits, as those assets or property could be liquidated. FA Qs About Unemployment Benefits in Pennsylvania Bankruptcy Cases Will You Lose Unemployment Benefits When Filing for Bankruptcy in Pennsylvania? As long as you claim the appropriate exemptions, your right to continue receiving unemployment benefits should remain protected. How Can You Protect Your Unemployment Benefits During Bankruptcy? You can protect your unemployment benefits by first claiming state or federal bankruptcy exemptions. You can also protect your benefits by keeping them separate from other funds and avoiding comingling them with other finances. If you mix your benefits with other funds, the protected status of those benefits may be questioned. Will Unemployment Benefits Affect Your Bankruptcy Petition? Yes. Even though unemployment benefits may be shielded from bankruptcy using exemptions, they are still factored into calculations of your income, which may affect how you pass a means test or support a payment plan. Can Unemployment Benefits Lose Their Protected Status During Bankruptcy? Possibly. It is best to keep any unemployment funds you receive in a separate account from all other funds. If you mix these benefits with other funds, such as those from a spouse in a joint account, the bankruptcy trustee assigned to your case might argue that those funds have lost their protected status, especially if they cannot easily be separated from the other funds in the account. Talk to Our Pennsylvania Bankruptcy Lawyers About Your Financial Situation Today Ask our Philadelphia bankruptcy attorneys for a free legal review when you call Young, Marr, Mallis & Associates at (215) 701-6519.

Bankr. W.D.N.C.: DBMP Gets Stay Pending Appeal on Privilege Waiver Ruling in Texas Two-Step Litigation Ed Boltz Fri, 05/15/2026 - 15:04 Summary: In one of the more consequential procedural rulings yet arising from the ongoing DBMP LLC “Texas Two-Step” bankruptcy, Judge Ashley Austin Edwards granted a stay pending appeal of her earlier privilege-waiver decision that had ordered disclosure of hundreds of allegedly privileged documents in the sprawling asbestos litigation surrounding DBMP and related entities. The underlying dispute concerns whether DBMP and affiliated defendants waived attorney-client privilege by making extensive legal “state-of-mind” arguments defending the restructuring and bankruptcy filing. The Court’s earlier ruling had found limited at-issue waiver as to several categories of communications involving the Texas Two-Step restructuring, funding agreements, and related legal strategy. That ruling ordered disclosure of roughly 600 documents, at least in part. The new opinion does not decide whether the privilege ruling was correct. Instead, it addresses whether disclosure should be paused while appellate courts review the issue. Applying the four-factor test from Nken v. Holder, the Court concluded that a stay was appropriate because the privilege issues are both unsettled and extraordinarily important. Judge Edwards emphasized that the law regarding “at-issue waiver” remains deeply divided among courts, particularly between the broader Hearn approach and the narrower Rhone-Poulenc line of cases. The Court reiterated that its earlier ruling attempted to carve out a middle ground: privilege may be waived when a party affirmatively injects dispositive legal state-of-mind assertions into litigation in circumstances where reliance on counsel is effectively unavoidable. Importantly, the Court held that the defendants had shown irreparable harm because once privileged materials are disclosed, “the cat is out of the bag.” Even if an appellate court later reverses the privilege ruling, opposing parties cannot realistically “unlearn” the information. The Court recognized the practical reality that litigants who review privileged communications may use that knowledge to shape discovery strategy, deposition questioning, and trial preparation in ways that can never be fully undone. At the same time, Judge Edwards acknowledged the competing concern that continued delay in asbestos litigation risks faded memories, unavailable witnesses, and prejudice to claimants suffering from serious disease. Nevertheless, the Court concluded that the privilege concerns outweighed those harms for now and granted the stay pending appeal. This latest ruling fits squarely into the continuing DBMP saga previously discussed here: 4th Cir.: Herlihy v. DBMP- Fourth Circuit Upholds Stay in DBMP ‘Texas Two-Step’ Asbestos Bankruptcy W.D.N.C.: Herlihy v. DBMP- Relief from the Automatic Stay Requires both Bad Faith and Objective Futility Bankr. W.D.N.C.: Official Committee Asbestos Personal Injury Claimants v. DBMP- Attorney Client Privilege Issues in Bankruptcy Commentary: While this decision arises in the unusual and enormously complex context of a Texas Two-Step asbestos bankruptcy, consumer bankruptcy attorneys should pay close attention to the Court’s discussion of stays pending appeal. Too often, requests for a stay pending appeal in consumer cases are treated as almost perfunctory denials unless the movant can prove likely outright victory on appeal. Judge Edwards’ opinion is a useful reminder that the standard is more nuanced—particularly where disclosure of information, foreclosure activity, repossession, or other irreversible consequences are involved. The opinion repeatedly stresses that some harms simply cannot be unwound after the fact. Once privileged information is disclosed, once strategic information is learned, or once actions are taken in reliance on a disputed order, appellate reversal may be an incomplete remedy. That logic applies far beyond asbestos bankruptcies. For consumer debtors, this reasoning may be particularly useful when seeking a stay pending appeal involving: Relief from stay orders leading to imminent foreclosure sales; Orders compelling turnover or disclosure of sensitive financial information; Dismissal orders where collection activity will immediately resume; Orders denying exemptions or avoiding liens where property may be sold before appellate review; Student loan discharge litigation involving compelled disclosures; Discovery sanctions or attorney-client privilege disputes. Indeed, there is a direct thematic overlap with the earlier DBMP decisions. In the Fourth Circuit’s decision in Herlihy v. DBMP, the courts likewise emphasized preserving the status quo while appellate review proceeds, especially where later reversal may be ineffective once actions occur. The broader lesson emerging from these cases is that bankruptcy courts retain substantial equitable discretion to prevent irreversible consequences pending appeal. There is also a subtle but important procedural point here. Judge Edwards specifically noted that difficult, unsettled, or first-impression issues themselves may support a stay pending appeal, even absent certainty that the movant will ultimately prevail. That may provide valuable authority for debtors confronting evolving legal issues involving student loans, mortgage servicing, Rule 3002.1 disputes, arbitration clauses, AI-generated evidence, cryptocurrency assets, or other developing areas where appellate guidance remains limited. And, perhaps most importantly, this opinion recognizes something bankruptcy practitioners already know from experience: appellate rights are meaningless if the damage is completed before the appeal can be heard. To read a copy of the transcript, please see: Blog comments Attachment Document in_re_dbmp.pdf (800.54 KB) Category Western District

Law Review: Bartell, Laura B._ THE STRONG-ARM POWER ON STEROIDS—EXPANDING NONAVOIDANCE TRUSTEE CLAIMS UNDER § 544(a)(1) Ed Boltz Wed, 05/13/2026 - 15:04 Available at:  https://www.ablj.org/the-strong-arm-power-on-steroids-expanding-non-avoidance-trustee-claims-under-%C2%A7-544a1-vol-100-issue-1-html/ Introduction: The so-called strong-arm power–§ 544(a) of the Bankruptcy Code has traditionally been used by a trustee in bankruptcy to avoid security interests in personal property or real property interests that are unperfected or unrecorded at the moment the bankruptcy case is commenced. Called one of the “avoiding powers” of the trustee, § 544(a) states that the “trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by” three different entities. Among those entities is a creditor that extends credit and obtains a judicial lien with respect to that credit at the time of the commencement of the case on all property on which a contract creditor could have obtained a judicial lien.  Section 544(a) makes clear that no such entity need exist; the trustee assumes the position of a hypothetical creditor that meets the applicable requirements. By contrast, § 544(b)(1) allows the trustee to avoid transfers or obligations that are voidable under applicable law by an actual creditor holding an allowable claim. That provision does not give the trustee more generally the “rights and powers” of those actual creditors.  In this article [the author] suggest[s] that, although § 544(a)(1) confers on the trustee the “rights and powers” of a lien creditor, it was never intended to allow the trustee to exercise rights and powers that are generally given under state law to all creditors rather than just lien creditors. Giving the trustee the exclusive right to bring causes of action that could be asserted by creditors as a group is inconsistent with the history, language, and policy underlying the avoiding powers.  Consumer Commentary: Professor Laura Bartell’s article is a careful but significant pushback against the expanding use of the trustee’s “strong-arm powers” under 11 U.S.C. §544(a)(1). Traditionally, bankruptcy lawyers think of §544(a) as the mechanism that allows a trustee to avoid unperfected liens, secret interests, or improperly recorded mortgages by stepping into the shoes of a hypothetical judicial lien creditor as of the petition date. Bartell argues that courts and trustees have increasingly attempted to stretch those powers far beyond their historical purpose. Rather than merely avoiding unperfected transfers, some trustees have attempted to use §544(a)(1) to assert broad creditor causes of action that belong generally to unsecured creditors as a class. The article contends that this “strong-arm power on steroids” is inconsistent with the statutory text, the legislative history, and the historical understanding of the trustee’s avoiding powers. The article traces the development of the strong-arm clause from the Bankruptcy Act of 1898 through the Chandler Act and ultimately into the Bankruptcy Code of 1978. Bartell emphasizes that the historical function of these provisions was narrow: to give the trustee the status of a hypothetical lien creditor so that unperfected or secret liens could be defeated under state law. Importantly, Bartell rejects two extreme interpretations of §544(a). On one hand, she disagrees with courts that treat §544(a) solely as an avoidance provision with no independent “rights and powers” component. On the other hand, she also rejects the expansive interpretation that would allow trustees to assert essentially any claim that unsecured creditors could have brought outside bankruptcy. Instead, she proposes a middle ground: the trustee should only be able to assert rights specifically tied to the status of a judicial lien creditor, execution creditor, or bona fide purchaser—not generalized unsecured creditor claims. That distinction may sound technical, but for consumer bankruptcy practice—especially Chapter 13 cases—it can be important. One of the most interesting implications of Bartell’s narrower reading of §544(a)(1) is how it intersects with the “best interests of creditors” or hypothetical liquidation test under 11 U.S.C. §1325(a)(4). To the extent that a Chapter 13 trustee  argues  unsecured creditors must receive larger distributions because a hypothetical Chapter 7 trustee could pursue additional litigation claims, marshaling actions, alter ego theories, veil piercing, lender liability claims, or other expansive estate recoveries through the trustee’s strong-arm powers. Bartell’s article provides substantial support for pushing back against those assumptions. If §544(a)(1) only grants the trustee those rights specifically belonging to a judicial lien creditor—as opposed to all conceivable unsecured creditor causes of action—then the hypothetical Chapter 7 liquidation analysis becomes materially narrower. A Chapter 13 debtor can argue that many speculative “trustee recovery” theories should not be included in the liquidation calculation because a Chapter 7 trustee would not actually possess those causes of action under a proper reading of §544(a). That matters because hypothetical liquidation analyses often become wildly inflated through conjectural trustee litigation recoveries. Trustees or creditors may assert that unsecured creditors would receive more in a Chapter 7 because the trustee could theoretically sue third parties, pursue insider recoveries, compel marshaling, or assert derivative creditor claims. But if Bartell is correct—and her statutory history analysis is persuasive—many of those claims are not actually part of the trustee’s §544(a)(1) arsenal. The article’s discussion of marshaling illustrates the point particularly well. Bartell notes that some courts have allowed trustees to invoke marshaling by claiming the status of a hypothetical judicial lien creditor under §544(a)(1), while other courts reject that approach as inconsistent with the historical purpose of marshaling doctrine and the Bankruptcy Code’s distribution structure. She argues that §544(a) should not be used to expand trustee powers beyond those specifically tied to lien-creditor status. For Chapter 13 debtors, this becomes a practical confirmation issue. When a trustee asserts that unsecured creditors must receive additional plan distributions because a hypothetical Chapter 7 trustee could pursue aggressive litigation theories, debtors may now have stronger authority to argue that such recoveries are too speculative, legally unavailable, or beyond the proper scope of §544(a)(1). This is particularly relevant in cases involving: alleged insider claims; veil piercing or alter ego theories; lender liability or tort claims belonging individually to creditors; speculative marshaling recoveries; equitable subordination theories; or claims against third parties that belong to creditors individually rather than the estate itself. Bartell’s historical analysis also dovetails with broader recent Supreme Court skepticism toward expansive bankruptcy powers untethered from statutory text. The article repeatedly emphasizes that Congress deliberately omitted broader creditor-representative provisions from the final enactment of the Bankruptcy Code, even though earlier drafts would have expressly authorized trustees to assert generalized creditor claims. That legislative choice matters. Consumer bankruptcy practitioners should pay close attention to this article because it provides a sophisticated doctrinal framework for resisting exaggerated hypothetical liquidation analyses in Chapter 13 confirmation disputes. Too often, hypothetical Chapter 7 recoveries are treated as boundless. Bartell reminds us that the trustee’s strong-arm powers were never intended to make Chapter 7 trustees omnipotent litigation representatives for every conceivable creditor grievance. Sometimes the strongest defense to an inflated liquidation analysis is simply insisting that §544(a) means what it actually says. To read a copy of the transcript, please see: Blog comments Attachment Document strong-arm-power-on-steroids.pdf (278.17 KB) Category Law Reviews & Studies

Law Review: Jason Iuliano, Gendered Outcomes in Student Loan Bankruptcy, 42 Emory Bankr. Dev. J. 43 (2026). Ed Boltz Tue, 05/12/2026 - 15:14 Summary:  This is one of those articles that forces practitioners to stop, re-read the data, and ask whether what we think is happening in bankruptcy court is actually happening. Professor Jason Iuliano examines more than 1,300 student loan adversary proceedings over a sixteen-year period and finds a striking—and recent—shift: women now outperform men in obtaining student loan discharges, particularly in the post-2022 DOJ/Department of Education guidance era. That result is counterintuitive for at least two reasons: In most areas of civil litigation—including bankruptcy generally—women tend to fare worse than men. There is no meaningful difference in the underlying financial metrics between male and female debtors seeking discharge. Yet the outcomes diverge. And not by a small margin—89% success for women versus 82% for men in the most recent data. The Process Matters The article grounds this shift in the mechanics of student loan litigation itself: Discharge still requires an adversary proceeding under 11 U.S.C. § 523(a)(8) Courts apply either Brunner or totality of the circumstances, though empirically those tests converge The 2022 DOJ Guidance introduced a standardized attestation process, encouraging stipulations and streamlining outcomes Post-guidance, results have improved dramatically for debtors overall: ~87% of cases now result in some discharge relief Median resolution time has dropped to ~8 months Most cases resolve through settlement rather than trial But even within that improved landscape, women do better. What Doesn’t Explain the Gap The article methodically eliminates the usual suspects: Debt levels? No meaningful difference Income/assets? Comparable Caregiving burdens? More common for women, but not explanatory Attorney representation? Helps—but does not eliminate the gender gap Even pro se women outperform pro se men—which should make every consumer bankruptcy attorney raise an eyebrow. What Might Explain It Iuliano’s most compelling insight is not doctrinal—it is narrative and evidentiary. The DOJ’s attestation process rewards: Documented hardship Long-term structural disadvantage Coherent life narratives tied to financial distress And here is the key move: The system may now be better calibrated to recognize and credit forms of hardship that women disproportionately experience—and can more effectively articulate. This includes: Economic abuse Interrupted careers Caregiving-related financial instability Long-term income suppression In other words, the legal standard didn’t change—but what “counts” as persuasive evidence did. Commentary: 1. A Rare Inversion in Civil Litigation This is a remarkable reversal. As the article carefully documents, across torts, property disputes, benefits claims, and even Chapter 13 outcomes, women generally fare worse in civil adjudication. Yet in student loan discharge litigation—arguably one of the most difficult forms of relief—women now outperform men. That suggests something deeper than bias alone. It suggests fit between legal standard and lived experience. 2. The DOJ Guidance Didn’t Just Simplify—It Changed the Game From a practitioner’s standpoint, the 2022 Guidance is doing more than speeding up cases: It standardizes proof It reduces adversarial friction It privileges narrative coherence over technical litigation traps And that last point is critical. The old system often rewarded: Aggressive litigation Technical compliance with Brunner factors Procedural endurance The new system rewards: Credible hardship storytelling backed by documentation That is not a soft standard—it is a different one. 3. Practice Pointer: This Is About How You Tell the Story For those of us litigating SLAP cases (or designing them), this article is a blueprint: The winning case is no longer just: Income vs. expenses IDR enrollment history Mechanical Brunner prongs It is: A life narrative tied to structural hardship Supported by documentation Framed through the DOJ attestation lens And if women are outperforming men, it raises a practical question: Are we—consciously or not—failing to develop equally compelling narratives for male debtors? 4. The Bigger Problem: Access Still Remains the Bottleneck Even with all this progress, the article highlights a sobering statistic: Only 0.2% of bankruptcy filers with student loans ever bring an adversary proceeding That is the real scandal. Not who wins—but who never seeks a discharge of their student loans. 5. A Broader Lens for Consumer Bankruptcy Practice This article fits neatly into a larger theme we’ve been seeing: Student loan discharge becoming more attainable Courts (and DOJ) moving toward functional, evidence-driven analysis Increasing importance of attorney-guided narrative construction And perhaps most importantly: Bankruptcy relief is increasingly shaped not just by financial data—but by how that data is translated into human experience. Bottom Line This is not just a gender study. It is a roadmap for how student loan discharge actually works in 2026. Women are winning more—but not because they owe less or earn less The DOJ process is rewarding certain kinds of hardship evidence Attorneys who understand that shift will dramatically improve outcomes for all clients And the real takeaway: The future of student loan discharge litigation is not just legal—it is narrative, structural, and strategic. _________________ Coda: Two Articles, One Conversation There is a certain serendipity—and perhaps something more intentional in the academic air—when two contemporaneous articles land on our desks, each examining gender in bankruptcy from very different vantage points, yet converging on a common theme. On the one hand, Gendered Outcomes in Student Loan Bankruptcy shows women outperforming men in obtaining discharge under § 523(a)(8), particularly in the post-2022 attestation era. On the other, When She Fails: Women Entrepreneurs and Gender Gaps in Business Bankruptcy finds women-owned firms more likely to be pushed toward liquidation and less likely to successfully reorganize—especially when judicial resources are strained. Put together, these are not contradictory findings. They are complementary—and revealing. They suggest that gender disparities in bankruptcy are not fixed advantages or disadvantages. Instead, they are context-dependent outcomes shaped by the structure of the legal process itself: Where the system rewards documented hardship, narrative coherence, and individualized assessment (as in student loan adversary proceedings), women may benefit—perhaps because the process captures structural disadvantages they disproportionately experience. Where the system is driven by speed, creditor pressure, and institutional constraints (as in small business Chapter 11 cases, particularly under judicial congestion), those same structural disadvantages may instead compound into worse outcomes. In other words, bankruptcy does not treat gender uniformly. It amplifies the features of whatever process is in place. For practitioners, judges, and policymakers, the lesson is both practical and profound: If we want equitable outcomes, we cannot just look at who the debtor is—we must look carefully at how the system evaluates them. And for those of us in the trenches, this pairing is a reminder that the evolution of bankruptcy law is happening in real time—not just through statutes and cases, but through the quieter recalibration of procedures, burdens, and the stories that courts are willing to hear. To read a copy of the transcript, please see: Blog comments Attachment Document gendered_outcomes_in_student_loan_bankruptcy.pdf (920.39 KB) Category Law Reviews & Studies

NC Bus. Ct.: Allianz PCREL v. BLV Ascend—Receivership Stands Alone as Guaranty Claim Dropped; Another Insolvency Case Outside Chapter 11/Subchapter V Ed Boltz Thu, 05/07/2026 - 16:01 SummaryIn Allianz v. BLV Ascend, the North Carolina Business Court (Chief Judge Michael Robinson) delivers a clean, practical ruling on a somewhat over-lawyered problem: whether a plaintiff needs court permission to dismiss a guaranty claim—and whether doing so might jeopardize an already-in-place receivership. The short answer: no and no. The Ruling (In Brief) The plaintiff, having already secured appointment of a receiver over the borrower entities, sought (out of “an abundance of caution”) to (1) dismiss its guaranty claim against individual guarantors and (2) obtain an order confirming that the receivership would continue. The Court declined both requests: No court order needed for dismissal. Because the plaintiff had not rested its case, it could voluntarily dismiss the guaranty claim under Rule 41(a)(1) without judicial involvement. Receivership remains intact. The Court held that under N.C.G.S. § 1-507.24, a receivership can stand even if it is the only remaining claim. So dismissing the monetary claim does not undermine the receivership. Motion denied (largely as unnecessary). The Court effectively told the plaintiff: you can do this yourself, and nothing breaks if you do. Commentary: This is one of those decisions that, while not flashy, is deeply instructive—particularly for those of us operating at the intersection of state court remedies and bankruptcy strategy. First, the Court reinforces a fundamental but often overlooked point: not every procedural step requires judicial blessing. Rule 41(a)(1) exists precisely to allow plaintiffs to narrow or abandon claims without burdening the court. Filing a motion here added cost and delay without necessity. Second—and more interestingly—the opinion provides helpful clarity on the independence of receivership as a remedy. The Court reads § 1-507.24 pragmatically: if a receivership can be initiated as the sole relief, it can certainly continue as the sole relief. That logical symmetry matters. But stepping back, this case also fits squarely within a broader and increasingly familiar trend: insolvency proceedings being filed as state-court receiverships rather than Chapter 11—or Subchapter V—bankruptcy cases. Particularly in large commercial real estate defaults like this one (involving tens of millions in debt), creditors are increasingly opting for receivership as a faster, more controlled path to take over and administer distressed assets. That shift is not just procedural—it is substantive. Receiverships operate outside the Bankruptcy Code’s framework: no nationwide automatic stay, no centralized claims allowance process, no plan confirmation structure designed to balance competing creditor interests. Yet, as this decision reflects, once a receiver is in place, the proceeding takes on a life of its own, and courts are reluctant to disturb it absent a clear change in circumstances. Finally, the Court’s quiet nod to § 1-507.37(a)—that a receivership continues until formally discharged—underscores something familiar to bankruptcy practitioners as well: once a court installs a fiduciary to manage distressed assets, it does not unwind that structure lightly. Takeaway If you’re representing a creditor (or trustee) using receivership as an asset-preservation tool, this decision is reassuring: you can streamline your claims without destabilizing the receivership. And for debtor’s counsel, the larger lesson is more cautionary: more insolvency disputes are being resolved outside of bankruptcy altogether, often leaving guarantors and other stakeholders without the protections—and leverage—that Chapter 11 or Subchapter V might otherwise provide. To read a copy of the transcript, please see: Blog comments Attachment Document allianz_pcrel_us_debt_s.a._v._blv_ascend.pdf (127.32 KB) Category NC Business Court

Bankruptcy may be the best solution to your financial problems. If you are in dire straits and need to file for bankruptcy now to take advantage of the automatic stay that would shield you from creditors’ legal action, our team can help you file an emergency petition. Keep in mind, filing a bankruptcy petition comes with fees. The fees required when filing an emergency bankruptcy petition will depend on your petition. Chapter 7 fees total $338. If you file a Chapter 13 petition, you must pay a total fee of $313. Fees are usually paid in full and up front. However, you may elect to pay in installments. If you truly cannot pay the fee, we can submit a fee waiver, but the fee is not guaranteed to be waived for everyone. To start your emergency petition, call our Philadelphia bankruptcy lawyers with Young, Marr, Mallis & Associates at (215) 701-6519 and ask for a free legal review. How Much Does it Cost to File an Emergency Bankruptcy Petition in Pennsylvania? Unfortunately, filing for bankruptcy is not free. Petitioners must pay a fee, which can be difficult for many, as most petitioners are already in financial trouble. Below are the fees for some of the more common petitions filed by individuals or married couples. Chapter 7 Fees One of the most common bankruptcy petitions is a Chapter 7 petition. When filing an emergency petition, only a few select documents and forms are required for the initial filing. Once filed, an automatic stay may be imposed, which protects you from legal action from creditors, like foreclosure. To file an emergency Chapter 7 bankruptcy petition, you must pay a fee of $338. This fee includes the filing fee for the petition, as well as a $15 trustee fee and a $78 administrative fee. Chapter 13 Fees You might instead wish to file an emergency Chapter 13 bankruptcy petition. Again, an emergency petition requires only a few forms and documents. All remaining documents must be filed within 14 days of the initial filing. An emergency Chapter 13 petition involves a total fee of $313. Like the Chapter fee, this includes a $78 administrative fee. However, there is no trustee fee, as a bankruptcy trustee is not required for a Chapter 13 case. Paying Fees in Installments Bankruptcy fees can be expensive, especially for those facing financial struggles. If the fee is too much for you to afford up front, you may be able to pay it over time in installments. To pay the fee in installments, our Pennsylvania bankruptcy attorneys must submit Form 103A along with your emergency bankruptcy petition. If approved, you may be allowed to pay the fee in up to four monthly installments. The total fee must be paid in full within 120 days of the initial filing. Fee Waivers It is possible to have the fee completely waived, and you will not have to pay anything when we file your emergency petition. However, fee waivers are available only for Chapter 7 petitions, not Chapter 13 petitions. To waive the fee, we must prove that you satisfy specific criteria required by the court. First, we must prove that your income is less than 150% of the income at the official poverty line for your family or household size. This number is determined by the federal Department of Health and Human Services’ poverty guidelines. Second, we must be able to prove that you cannot afford to pay the fee in installments. Remember, the fee must be paid within 4 months, which may be more than many can afford. When Do You Pay the Fee to File an Emergency Bankruptcy Petition? Bankruptcy fees can pose a significant financial hurdle for petitioners who are already struggling with their finances and debts. Knowing when to pay the fee may help petitioners plan ahead, even when filing emergency petitions. Payment for the Initial Filing Bankruptcy filing fees are generally required up front when you file the initial petition. This goes for standard petitions and emergency petitions. If you wish to pay the entire fee up front, you must include payment in your initial filing. As mentioned, you may opt to pay the fee in a four-month installment plan. The first payment would be due upon filing, with the remaining payments paid within the next 120 days. Filing Remaining Documents and Forms When filing an emergency petition, only a few documents and forms are required at the initial filing to start the case and activate the automatic stay. You should not have to pay additional fees when filing the remaining forms necessary for your bankruptcy case. These forms must be filed within 14 days of the initial filing. If you pay the entire fee up front, you do not need to pay any additional fees when filing the remaining forms and documents. If you are on an installment plan, you would make payments according to the plan’s terms, regardless of when we file the remaining documents. Filing Amendments to Your Emergency Petition Many bankruptcy petitioners realize that certain information on their initial filing must be altered later. This may be due to a clerical error or minor oversight, and the court generally allows petitioners to make amendments, within reason. If we must amend the debtor’s schedules, list of creditors, or the creditor mailing list, there is a $34 fee. However, a bankruptcy judge may waive this fee in any case for good cause. FA Qs About Filing for Emergency Bankruptcy in Pennsylvania What is an Emergency Bankruptcy Petition? An emergency bankruptcy petition is a petition that includes only the bare minimum forms and documents needed to begin the case. All remaining documents must be filed within 14 days. Emergency petitions are often filed when petitioners want to avoid imminent adverse legal action from creditors. How Much Does it Cost to File an Emergency Bankruptcy Petition? The fee for filing a Chapter 7 emergency petition is $338. The fee for a Chapter 13 petition is $313. This is the total fee, including administrative costs and a trustee fee for Chapter 7 petitions. What if You Cannot Afford to Pay the Fees to File an Emergency Bankruptcy Petition? If you cannot afford the fee, it may be possible to be placed on a four-month installment plan. Alternatively, you may have the fee waived if your income is at least 150% below the poverty line for your income and household size, and you cannot afford the installment plan. How Soon Do You Need to Pay the Fee for an Emergency Bankruptcy Petition? Generally, fees must be paid in full and up front unless special circumstances exist. The fee may be paid over time if you are placed on an installment plan. If you do not pay the fee, your case may be dismissed, unless the fee is waived. When Should You Contact a Lawyer About Filing an Emergency Bankruptcy Petition? You should contact an attorney about filing an emergency petition right now. If creditors are taking adverse legal action against you, such as initiating foreclosure, you must file an emergency petition as soon as possible. Ask Our Pennsylvania Bankruptcy Attorneys for Help Now To start your emergency petition, call our Pennsylvania bankruptcy lawyers with Young, Marr, Mallis & Associates at (215) 701-6519 and ask for a free legal review.