Although I enjoyed associating with the law firm Silverman/Thompson/Slutkin/White, it was time to return to Timonium- my clients did not want to go downtown anymore & they certainly did not want to pay for parking.  I always have tried to be accessible to clients- being available after regular business hours, having a 24 hour return phone call policy, meeting with clients on weekends as necessary.  Now I have free parking right in front of the building, covered parking for inclement weather and I am right off the expressway (I-83 North, Padonia Road exit).  Come see me & I will take you to lunch at Liberatore’s Restaurant downstairs!!The post I’M BACK IN TIMONIUM! HERE IS MY NEW ADDRESS- 9515 DEERECO RD, STE 407, TIMONIUM MD 21093 first appeared on Scholnick Law.

Law Review: Simmons, Joseph, Reconstructing the Bankruptcy Power: An Originalist Approach (October 31, 2021). 131 Yale L.J. 306 (2021) Ed Boltz Mon, 01/24/2022 - 03:23 Abstract: This Note responds to two distinct difficulties in the constitutional law of bankruptcy. First, many bankruptcy scholars and practitioners intuit that the Thirteenth Amendment places important limitations on the law of personal bankruptcy, but this intuition is difficult to cash out in a convincing legal argument. Second, modern bankruptcy law requires an expansive construction of the bankruptcy power, but such a construction is difficult to ground in the meaning of the Bankruptcy Clause in 1789. This Note resolves both difficulties by showing how the proper legal construction of the bankruptcy power changed during Reconstruction with the ratification of the Thirteenth Amendment in 1865. Before Reconstruction, the bankruptcy power was limited to the creation of collective-creditor remedies against merchants who committed acts of insolvency. The Thirteenth Amendment both granted Congress new powers to legislate against relations of economic domination, including relations between creditors and insolvent debtors, and altered the function that the bankruptcy power plays within the Constitution. These changes amounted to a reconstruction of the bankruptcy power, such that bankruptcy law now has as its primary purpose the provision of a “fresh start” to the honest unfortunate debtor. This argument helps ground the constitutionality of both voluntary bankruptcy and corporate bankruptcy, but its most important implications are for consumer bankruptcy law, particularly the status of the debtor’s fresh start and the grounds on which it can be denied. Commentary: An obvious missed opportunity would have been to include Abraham Lincoln's quote from the Gettysburg Address, which together with his Second Inaugural Address are foundational to the new understanding of the entire Constitution that followed his death in the Reconstruction Amendments, by noting that the bankruptcy clause as reconstructed by the 13th Amendment provided that debtors too would "have a new birth of freedom." The discussion in this article of how the term "uniform" in the Bankruptcy Clause relates to the parallel term in the naturalization powers granted to the federal government is very pertinent to the case of Siegel v. Fitzgerald, which is currently pending in the Supreme Court, and concerns whether the two systems of bankruptcy oversight, the Bankruptcy Administrators in North Carolina and Alabama and the U.S. Trustee Program in the rest of the country, are uniform. As discussed by James Madison in the Federalist No. 42, the uniformity in the naturalization power was meant to prevent the "very serious embarrassment" of states racing to the bottom in easing immigration. Similarly, the uniformity requirement in the bankruptcy clause should be seen as a tacit and tactful rebuke to the forum shopping between states in regards to debt relief. The uniformity was meant less to apply to federal choices regarding bankruptcy. Further, this article makes clear that advocates for student loan debt relief, rather than grounding their arguments on the Bankruptcy Clause, which was originally meant as a right creditors had to force debtors into bankruptcy, would be on firmer ground viewing the Bankruptcy Clause as reconstructed through the lens of the 13th Amendment prohibition on "involuntary servitude." Then the question becomes whether a student loan repayment scheme, such as an Income Driven Repayment plan, is so coercive that it becomes "involuntary servitude." That coercion becomes clear when the debtor is insolvent and cannot repay. While ID Rs do not generally consider a debtor's assets, the lack of both those and any ability to meaningfully repay the student loans could be seen as unconstitutional involuntary servitude. The article does in fact argue that the "undue hardship" standard for allowing discharge of student loans fails this and is "in a constitutional sense, not ... bankruptcy at all." For a copy of this article, please see: Reconstructing the Bankruptcy Power: An Originalist Approach Blog comments Category Law Reviews & Studies

Summary: The Trustee sought to avoid two transfers, in the total amount of $30,000, made by the Debtor from his wholly owned corporation to Michael Campbell. The only issue in the avoidance action was whether the Debtor received less than … Bankr. M.D.N.C.- Angell v. Tarlton Polk (In re Ewert)- Avoidable Transfers Read More » The post Bankr. M.D.N.C.- Angell v. Tarlton Polk (In re Ewert)- Avoidable Transfers appeared first on .

4th Circuit: Alexander v. Carrington Mortgage- "Collector" under Maryland Consumer Protection Laws Contrasted with "Debt Collector" under the FDCPA Ed Boltz Mon, 01/24/2022 - 00:15 Summary: In a suit brought against Carrington Mortgage Services, LLC, the borrowers alleged that Carrington violated the Maryland Consumer Debt Collection Act (MCDCA), which largely incorporates the Fair Debt Collection Practices Act (FDCPA), and the Maryland Consumer Protection Act (MCPA) by charging $5 convenience fees to borrowers who paid monthly mortgage bills online or by phone. The district court dismissed the case, but as the Fourth Circuit found Carrington to be a “collector” which under the pursuant to Md. Code Ann., Com. Law § 14-201(b) is defined as “a person collecting or attempting to collect an alleged debt arising out of a consumer transaction.” This contrasts with the definition of "debt collector" under the FDCPA at 15 U.S. Code § 1692a(6), which among other this includes the requirement that the debt be in default. That the Maryland legislature chose to incorporate the "substantive provisions" of the FDCPA found in sections 80 through 812, but not the definitions in section 803, thereby providing greater protections to Maryland consumers is a policy choice that Maryland or any other state is free to make. Accordingly, the $5 convenience fee, which was not permitted by law, violated Maryland law. Commentary: While North Carolina was not as explicit in its incorporation of the FDCPA in N.C.G.S. §75-50 et seq., its definition of a "debt collector" as "any person engaging, directly or indirectly, in debt collection from a consumer except those persons subject to the provisions of Article 70, Chapter 58 of the General Statutes" is similarly broad and encompasses original creditors, subsequent assignees, regardless of whether the debt is in default. It did not help Carrington Mortgage that Judge Wilkinson questioned how it made sense for Carrington Mortgage to process paper checks for free, when that cost it as much as $4, but charged $5 for online payments less that 50¢ . For a copy of the opinion, please see: Alexander-v.-Carrington-MortgageDownload Blog comments Category 4th Circuit Court of Appeals

Bankr. M.D.N.C.- Angell v. Tarlton Polk (In re Ewert)- Avoidable Transfers Ed Boltz Sun, 01/23/2022 - 23:45 Summary: The Trustee sought to avoid two transfers, in the total amount of $30,000, made by the Debtor from his wholly owned corporation to Michael Campbell. The only issue in the avoidance action was whether the Debtor received less than equivalent value for the transfers. The Trustee asserted these were gifts and the Debtor that they were loans. The Trustee brought a Motion for Summary Judgment. Michael Campbell presented ambiguous testimony, stating at one point in in his deposition that "No, he didn't loan me money. I worked for it." but then later "No gift, never a gift. I worked for it." Further evidence showed that the transfers were repaid through work Mr. Campbell performed for the Debtor. With "evidence that cuts in both directions", but viewing such in the light most favorable to the Debtor, the bankruptcy court denied the motion. Commentary: Michael Campbell as Walt Whitman- "Do I contradict myself? Very well then I contradict myself, (I am large, I contain multitudes.)" For a copy of the opinion, please see: Angell-v.-Tarlton-Polk-PLLC Download Blog comments Category North Carolina Bankruptcy Cases Middle District

Bankr. E.D.N.C.: In re Cook- Mortgage Deduction on the Means Test not Capped at IRS Local Standard Ed Boltz Sun, 01/23/2022 - 23:30 Summary: The Cooks filed a Chapter 13 bankruptcy and, being above median income, were required to calculate their "projected disposable income" using Official Form 122C-2. As their plan provided for the retention of their home and cure and maintenance of the on-going mortgage, they deducted their monthly mortgage payment of $2,233.34 from the Means Test, despite the IRS Local Standard for mortgage expenses being only $1,098.00. The Trustee objected, following In re Harris, 522, B.R. 804 (Bankr. E.D.N.C. 2014), which held that “that the home and vehicle allowances serve only to operate as a ‘cap’ on the amount the Debtors may deduct, when their average monthly secured home and vehicle payments exceed the Standard amounts.” Here, however, the bankruptcy judge rejected that reasoning, finding that "[i]n enacting the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) in 2005, Congress intentionally withdrew the discretion of bankruptcy judges to determine what expenses were “reasonable” for above-median-income debtors." As such, 11 U.S.C. §707(b)(2)(A)(iii) was unambiguous when it directs that: The debtor’s average monthly payments on account of secured debts shall be calculated as the sum of—(I) the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the filing of the petition . . .. (Emphasis added.) Accordingly, despite the "occasional peculiarity", as Ransom v. FIA Card Servs., N.A., 562 U.S. 61 (2011) described this potential outcome, this deduction was mandated by Congress and it was "not the function of this court to mold its decisions to policy concerns." Commentary: This was one of the last decisions by Judge Stephani Humrickhouse before her retirement and, to the extent that it created a split within the Eastern District case law (and this case has been certified for direct appeal to the 4th Circuit), the consumer bar is grateful, as it is for all of her years of service. For a copy of the opinion, please see: In-re-CookDownload Blog comments Blog tags Means Test Category North Carolina Bankruptcy Cases Eastern District

N.C. Court of App.: Reverse Mortgage Solutions v. Dufault- Inadequate Description of Real Property in Deed of Trust Ed Boltz Sun, 01/23/2022 - 23:01 Summary: Paul and Anita Richardson purchased a 1.26 acre tract of land ("main property") from Old Fort Golf Course in 1962 and then in 1978 purchase two adjacent parcels consisting of 0.181 acres and 0.009 acres ("adjacent properties"). All three parcels had the same mailing address and tax parcel identification number. In 2009, the Richardsons obtained a reverse mortgage in the amount of $297,000 to build a home on the 1.26 acres, but the Deed of Trust only contained a metes and bounds description of the adjacent properties, accompanied by four general descriptions including "a part of those certain lands described in the 1960 Deed conveying over 100 acres to Old Fort Golf Course, "subject to those certain restrictions" recording in the 1978 Deed, known as "the improvements thereon better know as [located at the mailing address], and "BEING all and the same lot of ground which by Deed dated 5 October 1978, and recorded among the Land Record of McDowell County, North Carolina in Liber 278, folio 822 was granted and conveyed by Old Fort Golf Course, Inc." unto the Richardsons. After the deaths of Paul and Anita Richardson, the three properties were left to her daughter Donna Edmisten. Reverse Mortgage Solutions commenced foreclosure in April 2018, conveying the adjacent properties to Reverse Mortgage Solutions. That Deed only included the metes and bounds description for the adjacent properties but did include the mailing address, the description of improvements and the PIN. On July 28,2018, Donna Edmisten conveyed the main property to the Dufaults. In June 2020, Reverse Mortgage Solutions brought an action seeking quiet title against the Dufaults, arguing that the main property was also subject to the Deed of Trust. The trial court dismissed the complaint pursuant to Rule 12(b)(6) and Reverse Mortgage Solutions appealed. The Court of Appeals upheld the dismissal holding that “only when the specific description is ambiguous, or insufficient, or there is a reference to a fuller or more accurate description, that the general description is allowed to control.” Lee v. McDonald, 230 N.C. 517, 521, 53 S.E.2d 845, 848 (1949). It distinguished this case from Bank of America, N.A. v. Schmitt, 263 N.C. App. 19, 20, 823 S.E.2d 396, 397 (2018), where the Schmitts owned two contiguous tracts of land, Tract B and Tract C, with two separate addresses and obtained a construction loan from the bank to build a home on Tract B. There the Deed of Trust was held to attach to Tract B even though it only included a metes and bounds description for Tract C, since the reference to the address to Tract B as well. That was sufficient evidence of the intention that Tract B also be included. Here, however, the four general descriptions in the Deed of Trust were consistent (or at least not ambiguous) with the specific description of the adjacent properties. Commentary: These flawed description cases almost always seem to involve golf courses or reverse mortgages, so this was a double whammy. For reference sake, 0.009 acres is roughly 400 square feet, so the size of a small bathroom For a copy of the opinion, please see: Reverse-Mortgage-Solutions-v.-DufaultDownload Blog comments Blog tags deed of trust Category NC Court of Appeals NC Courts

Bankr. M.D.N.C.: Swink v. Fannie Mae- Actual Damages Sufficient for §524(i), RESPA and FDCPA Claims Ed Boltz Sun, 01/23/2022 - 19:24 Summary: Ms. Swink filed her first Chapter 13 bankruptcy in 2013 and, perhaps unwisely, proposed a plan with her mortgage payment to Fannie Mae being made directly. Twice during that case, Fannie Mae filed Motions for Relief, asserting that Ms. Swink was delinquent on payments, but then in both instances withdrawing those motions after its attorney represented to the court that Ms. Swink had brought her account current. Ms. Swink completed her Chapter 13 case and pursuant to the bankruptcy court's Standing Order at that time, the mortgage account was determined to be current. After the discharge and closing of the bankruptcy case, Fannie Mae commenced foreclosure. Ms. Swink filed a second bankruptcy two days after a foreclosure sale was held (but still within the upset period) This foreclosure also resulted in her homeowner's insurance being cancelled, due to a inaccurate statement by Fannie Mae that the property was no longer owned by Ms. Swink.) Ms. Swink later commenced an Adversary Proceeding against Fannie Mae asserting violation of §524(i), RESPA, Fannie Mae first argued that §524(i) was inapplicable as it was treated as a long-term nondischargeable debt in the first case. The bankruptcy court "easily dispensed" with this argument as § 524(i) is clearly applicable to long-term debts that are not discharged at the end of a bankruptcy plan. See Carnegie v. Nationstar Mortg., LLC (In re Carnegie), 621B.R. 392, 403–409 (Bankr. M.D.N.C. 2020). Further, Fannie Mae attempted to argue that the Proof of Claim, the payment histories and communications between the parties that Ms. Swink asserted showed inaccuracies and errors should be used as the basis for dismissal of the case. The bankruptcy court not only rejected this, as it would invert the standard under 12(b)(6) of viewing the evidence in the light most favorable to the plaintiff, but as the representations by the attorney for Fannie Mae in the first case were binding on it when: (1) Made during a judicial proceeding; (2) Deals with a fact; and (3) Is deliberate, clear, and unambiguous.” See PacNet Capital v. Syke Mineral Partners, LLC (In re Skye Mineral Partners, LLC) (D. Del. Nov. 16, 2020). Further, the bankruptcy court was not persuaded that Fannie Mae, through its servicer Mr. Cooper, corrected any failures under §524(i), when it acknowledge an error and "committed to advancing the account by 10 installments". The same day it made it committed to such, Mr. Cooper submitted an Affidavit in the foreclosure action asserting a continued default. Continuing to Ms. Swink's claims against Fannie Mae for violations of the FDCPA, RESPA, N.C.G.S. § 45, and other common law causes of action, the bankruptcy court held that it did have "related to" jurisdiction under 28 U.S.C. §157(b)(1), as these non-bankruptcy claims arose before the commencement of the current bankruptcy case and accordingly were both assets of the bankruptcy estate and could "conceivably have any effect on the estate being administered in bankruptcy." The bankruptcy court then found that as a result of the purported violations Ms. Swink had asserted actual damages and declined to dismiss those causes of action. Commentary: The present Rule 3002.1 would have avoided much of this, as both Rule 3002.1(c) would have obligated Fannie Mae to disclose asserted fees and charges and Rules 3002.1(f),(g) & (h) would have flushed out any assertion of delinquency at the end of the case or affirmatively and explicitly resulted in an order determining the mortgage to be current. In the present case, Fannie Mae's current counsel argued that the withdrawal of the Motion for Relief was in error as Ms. Swink was delinquent at that time. That withdrawal occurred October 10,2017. When Ms. Swink filed her second bankruptcy on September 27, 2019, Fannie Mae would still have been able to raise a malpractice claim against that attorney. Further, since the two-year Statute of Limitations for malpractice claims must be raised as an affirmative defense, Fannie Mae could still assert such against its earlier attorneys. (That creditors routinely file Proofs of Claim for stale debts, was recognized by the Supreme Court in Midland Funding v. Johnson.) While the idea of "professional courtesy" would seem to preclude that sort of claim, particularly in public, the similar concept of "common decency" on the part of Fannie Mae does not seem to extend to Ms. Swink. For a copy of the opinion, please see: Swink-v.-FNMA-Nationstar-MTD Download Blog comments Blog tags fdcpa mortgage foreclosure mortgage servicer Category North Carolina Bankruptcy Cases Middle District

Summary: Georgia-Pacific Holdings acquired Bestwall Gypsum Company in 1965, but as a result of decades-long asbestos litigation on July 31, 2017, Georgia-Pacific underwent a corporate restructuring, through a “divisional merger” under Texas law by which the old Georgia-Pacific ceased to … W.D.N.C.: In re Bestwall, L.L.C- Injunctive Relief Read More » The post W.D.N.C.: In re Bestwall, L.L.C- Injunctive Relief appeared first on .

W.D.N.C.: In re Bestwall, L.L.C- Injunctive Relief Ed Boltz Sun, 01/23/2022 - 17:16 Summary: Georgia-Pacific Holdings acquired Bestwall Gypsum Company in 1965, but as a result of decades-long asbestos litigation on July 31, 2017, Georgia-Pacific underwent a corporate restructuring, through a "divisional merger" under Texas law by which the old Georgia-Pacific ceased to exist and two new entities were created. (Called the "Texas Two-Step.") These were the new Georgia-Pacific and Bestwall, LLC. Bestwall received certain assets and liabilities, most importantly the liability under the asbestos litigation. Georgia-Pacific did agree to indemnify Bestwall for losses relating to that litigation. Tied to that indemnification was also a secondment agreement by which certain Georgia-Pacific employees with institutional knowledge of the litigation were assigned to work for Bestwall. Bestwall filed for Chapter 11 bankruptcy protection on November 2, 2017, and immediately sought injunctive relief against the asbestos litigants to extend the automatic stay to protect Georgia-Pacific, which the bankruptcy court granted pursuant to 11 U.S.C. §105. The asbestos litigants sought leave to appeal, with the district court agreeing that the injunctive relief was a final appealable order and that the asbestos litigants had standing for that appeal. The district court upheld the subject matter jurisdiction by the bankruptcy court as "related to" under 28 U.S.C. § 1334, as failing to provide the injunctive relief could conceivably affect the bankruptcy estate in the following ways: (1) The purpose of section 524(g) and the Chapter 11 reorganization was to address in one forum all potential asbestos claims; (2) It would distract Bestwall's personnel and impair the ability to reorganize if key personnel would be responsible for the defense of lawsuits against Georgia-Pacific; and (3) The indemnity obligations of Bestwall to Georgia-Pacific of would make judgments against Georgia-Pacific tantamount to judgments against Bestwall, depleting assets available to fund a section 524(g) trust. The district court held that this preliminary injunction was not an abuse of discretion by the bankruptcy court as the standard for such is: (1) likelihood of success on the merits; (2) irreparable harm in the absence of an injunction; (3) the balance of equities; and (4) whether an injunction is in the public interest. Commentary: The argument that Georgia-Pacific should itself instead file bankruptcy is obviously exactly what Georgia-Pacific does not want to do. Instead through this Texas Two-Step, it is able to shield its assets and perhaps as importantly protect its reputation. In the consumer context, this raises the question of whether individuals should be able to similarly divisively merge and create a new corporation holding all of their liabilities, sparing themselves and their credit score from the negative impacts of bankruptcy. That is, of course, ridiculous, since in America corporations are allowed all of the benefits and protections that individuals have, but the converse is never true. The earlier decision by the district court regarding discovery is available at In re Bestwall, L.L.C- Discovery Order is not Final Appealable Order For a copy of the opinion, please see: In-re-BestwallDownload Blog comments Blog tags appeal Category Western District Federal Cases