N.C. Ct. of App.: Israel v. Zachary- Landlord Interference With Tenant’s Property Leads to Conversion Liability (Damages Remanded) Ed Boltz Thu, 04/02/2026 - 15:13 Summary: In Israel v. Zachary, the North Carolina Court of Appeals affirmed that a landlord who interferes with a tenant’s efforts to retrieve property after eviction can be liable for conversion and unjust enrichment, though the court vacated the damages award for lack of sufficient valuation evidence. The Dispute Stephen Israel leased roughly 97 acres of farmland in Alamance County. After the lease expired, a dispute arose over whether it had been extended. While the landlord, Janet Zachary, pursued summary ejectment, Israel attempted to remove farm equipment and structures he had brought onto the property during the lease. The trial court found that Zachary interfered with those efforts—contacting the sheriff and confronting individuals helping Israel move equipment. After the writ of possession issued, Israel attempted to retrieve the remaining property within the statutory seven-day period but was slowed by health issues and weather. When he returned to finish removing the equipment, deputies ordered him off the property. The equipment remained there for years, exposed to the elements. The trial court concluded that Zachary had converted the equipment and been unjustly enriched, awarding $45,584 in damages. The Court of Appeals The Court of Appeals largely affirmed. First, it held there was competent evidence that Zachary interfered with Israel’s efforts to remove his property, supporting liability for conversion. Second, the court rejected the argument that the property was automatically abandoned after seven days under North Carolina’s eviction statutes. Those statutes allow disposal of tenant property only if the landlord follows specific procedures and does not block the tenant’s retrieval efforts. However, the court vacated the damages award. Although the record contained purchase prices and insurance valuations, it lacked evidence establishing the difference in fair market value before and after the alleged damage, which is required to calculate depreciation. The case was therefore remanded for a new damages determination. A Parallel Issue in Consumer Finance This decision also raises an interesting question for consumer creditors: when does insisting on procedural rights become “conversion”? In many consumer cases—particularly in bankruptcy—debtors do not voluntarily surrender collateral. Instead, they insist that creditors follow the proper legal procedures: In bankruptcy, a creditor must obtain a Motion for Relief from the Automatic Stay before repossessing collateral. Outside bankruptcy, the creditor must pursue replevin or claim-and-delivery remedies in state court. Creditors sometimes portray that insistence as wrongful “retention” of collateral. But the procedural protections exist for an important reason: due process ensures that the property is actually delivered to the correct party and not seized, stolen, or disposed of improperly. In other words, insisting on statutory procedures is not obstruction—it is the system working exactly as designed. A Practical Alternative: “Cash for Keys” Of course, the formal legal route—stay-relief motions, replevin actions, hearings, and orders—can be expensive and adversarial. If creditors truly want quick possession of collateral, there is often a simpler solution: pay the consumer to cooperate. In mortgage and foreclosure cases this practice is widely known as “Cash for Keys.” Rather than litigating possession, the creditor offers a modest payment to the occupant in exchange for an orderly turnover of the property. The same concept could work just as well in consumer repossession cases. Instead of spending thousands of dollars on attorneys’ fees and court costs, a creditor might simply offer a few hundred dollars for the debtor’s assistance in delivering the collateral promptly. That approach reduces litigation, preserves due process, and avoids disputes over who actually converted what. Takeaway: Israel v. Zachary is a reminder that interfering with someone’s ability to retrieve their property can easily create conversion liability. But it also highlights a broader point: when possession of property is disputed, the safest path is usually the procedural one—or better yet, a negotiated one. <strong>To read a copy of the transcript, please see:</strong> </strong><embed height="500" src="https://ncbankruptcyexpert.com/sites/default/files/2026-04/israel-v-zachary_0.pdf" width="100%"></embed> Blog comments Attachment Document israel-v-zachary.pdf (271.2 KB) Category NC Court of Appeals

N.C. Ct. of App.: Yurk v. Terra Center- Possession may be 9/10ths of the Law, but Holding It Hostage Gets Expensive Ed Boltz Fri, 04/17/2026 - 15:06 Summary: The Court of Appeals largely affirmed a substantial judgment against a storage operator that: Took and held a debtor’s property for over three years Moved it multiple times Refused return unless the owner signed a liability release Result: Conversion, trespass to chattels, and UDTPA → affirmed Compensatory, punitive, and treble damages → largely affirmed Attorney’s fees and allocation of enhanced damages → vacated and remanded for precision The legal takeaway is simple and blunt: 👉 You cannot hold property hostage to extract leverage. Commentary: Why This Matters in Bankruptcy (and Why “Just Surrender It” Is Dangerous) This case should be required reading for any consumer bankruptcy attorney—and frankly, for any creditor counsel who thinks informal repossession is a cost-saving shortcut. Because what happened here is exactly what can—and too often does—happen when debtors informally surrender collateral without process. 1. The Core Lesson: Possession Without Process Becomes Leverage The defendants in Yurk did not just take possession—they used possession as leverage: denying access moving property conditioning return on a release That is not merely aggressive—it is conversion + UDTPA liability. Now translate that into bankruptcy: A creditor who takes possession outside of formal process is one step away from the same exposure—plus automatic stay violations. 2. Why Debtors Should NOT “Just Surrender” Property Cases like this are precisely why consumer debtors should never casually surrender vehicles or personal property in bankruptcy. Instead, surrender should occur only: After an Order Granting Relief from Stay, or Through plan confirmation, or Post-discharge, and even then: 👉 Only with insistence on proper state-law process—typically a claim and delivery action. North Carolina’s claim and delivery procedure (see Affidavit and Request for Hearing) requires: sworn proof of entitlement to possession judicial oversight protections against wrongful detention or disposition That is not red tape—that is due process protecting against exactly what happened in Yurk. 3. The False Economy of Informal Repossession Creditors often think: “We’ll just grab the car and save the legal fees.” But Yurk demonstrates the opposite: avoiding process → increases litigation risk coercive behavior → triggers treble damages sloppy handling → invites punitive damages 👉 What looks like efficiency becomes exposure. 4. A Better Alternative: Structured Surrender Agreements If a creditor truly wants speed and cost savings, there is a better path—one that avoids both litigation and liability. The attached Surrender and Collateral Transfer Agreement (Motor Vehicle) provides a model: Key Features That Matter 1. Mutual Scheduling (Not Midnight Repossession) Delivery at a mutually agreed time and location No “self-help ambush” 2. Respectful Communication Requirement Contact limited to logistics Professional and courteous conduct required 3. Allocation of Risk and Costs Creditor bears all repossession and transport risk 4. UCC-Compliant Deficiency Protections Requires UCC 9-616 explanation Deadlines for filing claims Failure = full satisfaction 5. Bankruptcy Compliance Built In Explicit preservation of §§ 362 and 524 No reaffirmation or revival of liability 5. The “Cash for Keys” Reality (Even If It Feels Wrong) The most important—and most practical—term: Creditor pays the debtor $500 for cooperation. Yes, that may feel counterintuitive. But from a creditor’s perspective: Motion for Relief from Stay → legal fees Claim and Delivery → court costs + delay Risk of wrongful repossession → massive liability So the real calculation is:   Option Cost Risk Formal legal process Moderate Low Informal repossession Low upfront High liability Cash-for-keys agreement Minimal Very low 👉 A rational, cost-conscious creditor—particularly one focused on maximizing shareholder value—should “hold their nose” and choose the third option. 6. Bankruptcy Overlay: This Gets Worse Under § 362 Had Yurk occurred post-petition, the creditor would face: Automatic stay violations (likely willful) Void actions Actual and punitive damages Potential contempt sanctions And if property is not returned promptly: Turnover under § 542 Additional fee exposure 7. The Big Picture This case reinforces a fundamental principle that cuts across state law and bankruptcy: Possession is not ownership—and it is not leverage. And more pointedly: Using possession to coerce concessions is exactly the kind of conduct that courts punish—harshly. Final Take (Practical Advice) For debtors’ counsel: Never advise informal surrender without structure Insist on: court order plan confirmation or formal state process Use written surrender agreements when appropriate For creditors’ counsel: Avoid “self-help shortcuts” Use claim and delivery or structured agreements Consider cash-for-keys as a cost-control tool, not a concession Because as Yurk makes clear: The cheapest repossession is the one that doesn’t turn into a lawsuit—and the fastest one is the one done right. To read a copy of the transcript, please see: Blog comments Attachment Document surrender_agreement_motor_vehicle.docx (27.52 KB) Document cv200-en_affidavit_and_request_for_hearing_in_claim_and_delivery.pdf (132.5 KB) Document yurk_v._terra_center.pdf (198.33 KB) Category NC Court of Appeals

Filing for bankruptcy is not a simple process, and most people hire experienced bankruptcy attorneys to help them. However, you are not required to have a lawyer and may file for bankruptcy without legal representation. Be warned, proceeding without a lawyer is not a good idea. You should talk to an attorney about your situation. You should have a lawyer help you file for bankruptcy. These proceedings are known for being complicated, and it is very easy to make a mistake on your own. Certain mistakes could lead to a total dismissal of your case, and you will not be able to take advantage of the benefits of bankruptcy, such as having debts discharged. An attorney can help you make sure your bankruptcy petition is accurate and complete to avoid any errors that could cost you everything. Ask our New Jersey bankruptcy lawyers for a free, private case assessment by calling Young, Marr, Mallis & Associates at (609) 755-3115. Do I Need a Lawyer to File for Bankruptcy in New Jersey? While bankruptcy petitioners may file their cases without a lawyer, doing so is unwise. There are too many things that could go wrong, and the average person likely does not have the skills or experience needed to navigate complex bankruptcy laws and hearings. Filing for Bankruptcy Pro Se When a person files for bankruptcy on their own without a lawyer, it is called filing pro se. You have the right to represent yourself in almost all legal proceedings, including bankruptcy cases, and you can do so if you truly wish. However, filing pro se is usually not a good idea. Only those with experience in bankruptcy law and legal procedures should consider filing their case pro se. Is it a Good Idea to File for Bankruptcy without a Lawyer? It is not a good idea to file for bankruptcy without help from a lawyer. The process is far more complex than most people realize, and too many things could go wrong. Your bankruptcy petition must include very specific information about your finances. Not only does the court need a full list of all your assets, but your current financial situation will determine whether you are even eligible for bankruptcy. When Should I Hire a Bankruptcy Lawyer? You should hire a bankruptcy attorney before you file anything with the bankruptcy court. If you file your petition on your own, it may be possible to hire a lawyer later, but it is best to have a lawyer on your side before you file anything. Your initial petition is crucial and will set the tone for the remainder of your case. Our New Jersey bankruptcy lawyers must be sure to include all your relevant financial and banking information, including various assets or properties you own that could be liquidated. You may also protect certain assets by claiming certain bankruptcy exemptions in your initial petition. Many people are unaware that exemptions even exist, but a lawyer should know how to claim them to protect your property and assets. Possible Complications When Filing for Bankruptcy Without a Lawyer Again, filing for bankruptcy is complicated. There are numerous laws and legal procedures to navigate, and mistakes can be all too easy to make. Some mistakes could cost you everything, which is why you should hire a bankruptcy lawyer before filing anything. Disclosing Your Assets A crucial element of filing for bankruptcy is disclosing your assets. This requires that we provide a full explanation of all your financial assets, including bank accounts, properties, investments, and any other accounts or property. These disclosures must be full and complete. Failing to disclose certain assets may be considered fraud. Even if the failure is only an error, it could set your case back and cost you a lot of time. You might even face sanctions from the court. A lawyer can help you make sure your disclosures are complete and accurate so everything goes smoothly. Legal Errors or Mistakes Mistakes can lead to the dismissal of your case. For example, petitioners who file without a lawyer might accidentally forget to include certain creditors in the case, fail to disclose certain assets, or attempt to hide assets, not realizing that their actions are highly illegal. An attorney knows how to avoid mistakes and, if they do occur, how to correct them before they become a serious problem. Navigating Complex Bankruptcy Laws Filing for bankruptcy is much more than submitting some paperwork and showing up to court. There are important decisions to make and numerous hearings to attend. You must navigate complex legal procedures while understanding how to use the bankruptcy system to your advantage. Obviously, this is incredibly difficult, and a petitioner should not proceed without help from an experienced lawyer. FA Qs About Filing for Bankruptcy Without a Lawyer in New Jersey Am I Allowed to File for Bankruptcy Without a Lawyer in New Jersey? Yes. You are allowed to file for bankruptcy without a lawyer, known as filing pro se, but doing so is not advisable. Filing for bankruptcy is a complex process, and simple mistakes could lead to major consequences. Are There Any Good Reasons to File for Bankruptcy Without an Attorney? No. Many petitioners want to make the bankruptcy process more affordable by foregoing a lawyer and saving money on legal fees. While this is understandable, it is still not a good idea. Your attorney should be able to reach a fee agreement you can afford so you can get legal assistance. Should I Hire a Lawyer Before Filing for Bankruptcy? Yes. You should have a lawyer helping you from the very beginning. Hiring a lawyer after your case has already begin may make the case more difficult for your attorney, thereby complicating your case. How Can a Lawyer Help Me Through the Bankruptcy Process? Your attorney can help you prepare your initial petition, which must contain crucial information about your finances, creditors, and assets. If any of this information is incorrect or incomplete, the entire case could be dismissed. Your attorney can help you make sure all paperwork and documentation are accurate and complete, and that your case moves as smoothly as possible through the courts. What Happens if I Make a Serious Mistake in My Bankruptcy Case Without a Lawyer? You will be held responsible for any errors or mistakes in your bankruptcy case, and the court will not go easy on you because you do not have a lawyer. Your case could be dismissed because of serious mistakes, and you will not be afforded the relief of having any debts discharged. Contact Our New Jersey Bankruptcy Lawyers for Support Today Ask our Cherry Hill, NJ bankruptcy lawyers for a free, private case assessment by calling Young, Marr, Mallis & Associates at (609) 755-3115.

Bankruptcy has an immediate effect on a debtor’s credit score. The exact drop in points depends on how high their credit score was before they fell behind on debt and filed for bankruptcy. If you have a higher credit score before bankruptcy, over 700, the drop in points may be more significant than if you had a lower credit score, under 600, as the change should be proportional. A Chapter 7 case may have harsher credit score consequences than a Chapter 13 case. Our lawyers can help minimize the effects of bankruptcy on your credit score when handling your case and set you up for future success in improving your credit score after bankruptcy. You can call Young, Marr, Mallis & Associates at (215) 701-6519 in Pennsylvania or (609) 755-3115 in New Jersey for your free and confidential case review from our bankruptcy lawyers. What Happens if You File for Bankruptcy with a Low Credit Score? The hit your credit score takes when you file for bankruptcy is unavoidable, and so is how long you have to wait until the bankruptcy case is removed from your credit report. Immediate Drop in Credit Score Filing for bankruptcy has an immediate effect on the debtor’s credit score, even if it was already low. The actual change in credit score may be less severe if it was already low before you filed, such as under 600 points. The impact on your credit score is almost immediate after we file the bankruptcy petition, and it doesn’t wait to take effect at the end of your case. Place on Credit Report The bankruptcy case gets added to your credit report almost immediately as well. Regardless of what your credit was before you filed, the case could stay on your report for 7 to 10 years from the filing date, depending on the specific chapter you filed. What Happens if You File for Bankruptcy with a High Credit Score? Believe it or not, filing for bankruptcy before your credit worsens even further from missed payments and incurred debts can have drawbacks, as filing for bankruptcy with a high credit score has more consequences than filing with a low credit score. It’s important to weigh these considerations with our lawyers before filing a bankruptcy petition. If you have a high credit score when you file for bankruptcy, around 700 or above, you will experience a more significant drop than if you had a lower credit score, likely exceeding 200 points. The drop will be proportional to the total loss to your credit, which is more drastic if you had a positive credit history up until that point. There are no other major differences between filing for bankruptcy with a low or high credit score. That said, low or high credit scores can be indicative of other attributes that affect your bankruptcy case, such as your income and the chapter you can file, the type of debts you have, and the amount of debt you have. Do Chapter 7 and Chapter 13 Bankruptcy Affect Your Credit Score Differently? The specific bankruptcy chapter you end up filing could affect your credit score differently and determine how long the bankruptcy case remains visible on your credit report. Initial Score Impact Chapter 7 bankruptcies may trigger a more substantial drop in credit score than Chapter 13 bankruptcies. A Chapter 7 case is quicker because it involves asset liquidation and yields a fast debt discharge, so it affects your credit score more than Chapter 13, during which debtors consolidate and repay debts over time. Duration on Credit Report A Chapter 7 bankruptcy case may stay on your credit report for 10 years, while a Chapter 13 case may stay there for 7, regardless of how high your credit score was before the bankruptcy case. Time Until Improvement Although a Chapter 7 case stays on your credit report for longer, you may be able to start rebuilding your credit sooner. These cases typically take 4 to 6 months, while Chapter 13 cases can take 3 to 5 years. Perception from Lenders Chapter 7 and Chapter 13 bankruptcies on credit reports are typically perceived differently by creditors and lenders afterward. Chapter 7 filers may receive a more substantial discharge, which can be concerning to future creditors. On the other hand, seeing that you repaid all debts during a Chapter 13 case and followed the repayment plan exactly can give future creditors the confidence they need to open an account with you. How Can You Minimize the Impact on Your Credit Score When Filing for Bankruptcy? We can work to minimize the long-term impact on your credit from bankruptcy by setting up a repayment plan you can follow and providing you with useful money management tips. Follow Repayment Plan Stop bankruptcy from affecting your credit score even more than it already has by making timely payments during a repayment plan for Chapter 13. In addition to following the repayment plan, you must also stay up to date with all current bills so you don’t incur more debt or further harm your credit. We can organize a repayment plan that’s considerate of your current income and expenses, including debts you owe. That way, you are more likely to follow the repayment plan and not fall further behind. Monitor Credit Reports Monitoring credit reports during bankruptcy claims and ensuring they update debts as they are paid and settled is important. That confirms that you have settled the debt and do not currently owe the creditor anything. The debt may remain visible on your credit score, but it will not be reported as unpaid. Set Yourself Up for Future Success Set yourself up for future success by taking the mandatory credit counseling courses for debtors before filing for bankruptcy. With our help, make a financial plan you can stick to that considers all your sources of income, expenses, and potential costs. How Can You Rebuild Your Credit After Bankruptcy? Rebuilding your credit after bankruptcy is possible, and may happen sooner than you thought possible if you take the right steps. Don’t Incur Additional Debts To actively rebuild your credit after bankruptcy, you cannot incur additional debts. Getting into debt again soon after your bankruptcy case will further lower your credit score. If you have to file for bankruptcy again soon after your initial case, you will experience another significant drop. A previous bankruptcy case can affect your eligibility for the automatic stay that stops creditors from harassing you for repayment during the case, and add stress to the entire process. Get a Secured Credit Card A secured credit card is a great tool for rebuilding credit after bankruptcy. These credit cards require a deposit, and this deposit determines the credit card limit. Limiting your use of available credit each month and making payments on time can help you rebuild your credit even faster after bankruptcy. No credit is just as negative as bad credit, so do not be afraid to open a new line of credit after bankruptcy; just make sure you do it responsibly. Become an Authorized User Becoming an authorized user on someone else’s credit card, like a spouse or parent, helps you rebuild your credit when you cannot get approved for a credit card on your own after bankruptcy or when interest rates are too high. If the primary cardholder pays the credit card bill on time and consistently, that positively affects your credit as an authorized user. Implement Money Management Skills Implement the money management skills you learned from credit counseling courses and our bankruptcy lawyers during your bankruptcy case so that your credit only increases after bankruptcy and doesn’t worsen further. We can help you set up a budget that works for your family and lifestyle, helping you avoid getting into debt and facing bankruptcy again anytime soon. What Impacts Your Credit Score? Plenty of factors come together to determine your credit score, and learning more about them sets you on the right path toward rebuilding your credit after bankruptcy. Payment History Making timely payments contributes to a positive credit score. Frequently missing payments lowers your credit score and could put you into debt, making filing for bankruptcy almost unavoidable. Amounts Owed Your use of credit cards, along with your credit limits and the debts you owe, also affects your overall credit score. Lower utilization ratios are ideal for building credit. Maxing out credit cards and not making payment deadlines or failing to satisfy other debts seriously jeopardizes your credit score before you even file for bankruptcy. Length of Credit History A longer credit history contributes to a better credit score. If you only recently established your first line of credit, your credit score might be lower than if you had had accounts longer, even if you have met all payment dates so far. Regularly use accounts to create a solid credit history. Credit Mix Having a variety of credit accounts on your credit report also positively affects your credit score. A mix of credit cards and loans only makes your credit score higher if you pay them on time. Having too many lines of credit without meeting payment requirements can seriously harm your credit. It can be hard to have a mix of accounts after bankruptcy, as you might not get approved for loans for some time. New Credit Inquiries Every time you try to open a new credit card or another account, a hard inquiry is made on your credit report. This alone can affect your credit score, typically by about 5 to 10 points. Even a slight drop like this can take months of timely payments and regular utilization to erase. Bankruptcies Bankruptcy cases significantly affect credit scores, often by 100 points or more. Even after the bankruptcy case is over, it remains listed on your credit report and can be seen by future creditors or lenders for 7 to 10 years. Prior bankruptcies can affect your ability to get approved for new credit cards, mortgages, and other loans. For some, bankruptcy is the only option to settle debts. Rebuilding your credit is possible, so don’t let the drop in your credit score stop you from filing for bankruptcy if you are struggling financially. FA Qs About Your Credit Score and Bankruptcy Can Your Credit Score Affect Your Ability to File for Bankruptcy? Your credit score never affects your ability to file for bankruptcy. Bankruptcy affects a credit score, and the extent of the impact depends on the score’s standing at the time of filing. Does Your Credit Score Dictate the Bankruptcy Chapter You Can File? Credit score doesn’t dictate which bankruptcy chapter you can or should file; whether Chapter 7 or 13 better suits your situation depends on your income, assets, and the type of debt you have. People with lower incomes don’t automatically have lower credit scores, and vice versa. Can You Remove Bankruptcy from Your Credit Report Sooner? You cannot remove a bankruptcy case from your credit report earlier than the mandatory 7 or 10 years it must remain there, unless it is inaccurate. How Important is Improving Your Credit Score After Bankruptcy? Improving your credit score after bankruptcy is very important, especially if your credit score dropped substantially and you previously had a positive standing. How Quickly Can You Improve Your Credit Score After Bankruptcy? It may take a year or longer to see improvements to your credit score after your bankruptcy case ends. Establishing positive credit habits and money management skills can help you increase your credit score more quickly. Let Us Help with Your Bankruptcy Case For help with your case from our chapter 7 bankruptcy lawyers, call Young, Marr, Mallis & Associates at (215) 701-6519 in Pennsylvania or (609) 755-3115 in New Jersey.

Ankylosing spondylitis is an inflammatory musculoskeletal disease that tends to affect the spine and the sacroiliac joints, which connect the spine to the pelvis. The condition is a form of arthritis that can cause pain, stiffness, and discomfort in a person’s back and nearby joints. Severe cases may prevent a person from working, and they should speak to an attorney about filing for SSDI benefits. You may be eligible for SSDI benefits if you have a medical condition that prevents you from working. More specifically, you must be unable to perform Substantial Gainful Activity (SGA), and your condition must be expected to persist for at least 12 months or end in death. Ankylosing spondylitis may be considered a qualifying condition if it prevents you from working and is expected to last long-term. Begin your case with a free legal review by calling Young, Marr, Mallis & Associates at (215) 515-2954 and speaking to our disability lawyers. Can Someone Apply for SSDI Benefits if They Have Ankylosing Spondylitis? Ankylosing spondylitis, often called AS, often interferes with a person’s ability to work, and they may be eligible for SSDI benefits. If you have been diagnosed with AS, contact an attorney for help with your claim. AS and Substantial Gainful Activity A major component of SSDI benefits is SGA. Federal law defines SGA as work that is both substantial and gainful. Substantial work is any activity that requires significant mental or physical effort. Even part-time work may be substantial. Work that is gainful is done for payment or profit. Keep in mind that profits do not have to be realized for the work to be considered gainful. In 2026, work may be considered gainful if you earn at least $1,690 per month. If you are blind, this limit is increased to $2,830 per month. AS can be a very painful condition that affects your back and other joints, including your pelvis. For many, the pain is too intense to work through, and they may be unable to perform SGA. When Working with AS Becomes Impossible The exact cause of ankylosing spondylitis is not fully understood, but it is widely believed to stem from genetics, family history, and various environmental factors. It is usually not caused by a work-related accident or injury, or by repetitive manual labor. While AS may make work difficult, you must be able to prove that your condition is likely to persist long-term. Federal law requires that a condition be expected to persist for at least 12 months or end in death for the afflicted person to become eligible for SSDI. Obtaining a Diagnosis Medical evaluations and diagnoses are key to obtaining SSDI benefits. If you are experiencing symptoms of AS but have not yet seen a doctor, it might be difficult or impossible to obtain SSDI benefits. AS affects people differently. Some experience occasional flare-ups, while others might deal with longer-lasting pain. For some, the pain is manageable, but for others, it is debilitating. You must be evaluated by a doctor who can provide a formal diagnosis and prognosis that our disability lawyers can use to support your claims for SSDI. Does Ankylosing Spondylitis Prevent Someone from Working? Ankylosing spondylitis may prevent a person from working, depending on the severity of their condition. Again, it is imperative that a doctor evaluates you before you apply for SSDI benefits. Symptoms and Complications Symptoms of AS vary from person to person. Common symptoms include pain, stiffness, and fatigue, among others. For some, these symptoms may be so severe that they can no longer work. Others might only need a brief time away from work until their symptoms subside, or pain management and treatment options may help them to continue working. AS may involve various medical complications. Other joints that connect to the spine, including the pelvic and rib joints, may be affected in some cases. The more complications you experience, the less likely it is that you can continue working. Your Ability to Work Each person’s ability to work may differ. If the pain is uncomfortable but not debilitating, you may be able to continue working with help from medication or pain management plans provided by a doctor. Others might have to leave their current job and find other work that they can do with this condition. This may be easy for some but not others. Available Treatments Whether your condition prevents you from working may depend on the treatment options available and how they alleviate your symptoms. There is no known cure for AS, but treatments are available to manage the condition and alleviate pain. Have you sought treatment? Can you continue working with treatment? Is working impossible even with treatment and pain management? The answers to the questions will help you and your lawyer determine if you are eligible for SSDI. FA Qs About Disability for Ankylosing Spondylitis Is Someone with Ankylosing Spondylitis Eligible for SSDI Benefits? Possibly. AS is a musculoskeletal condition that may make someone eligible for SSDI benefits if that person cannot perform substantial gainful activity because of their condition. Also, the condition must be expected to persist for at least 12 months. How Can Ankylosing Spondylitis Interfere with Your Ability to Work? AS may cause pain and stiffness in the spine and nearby joints. Some endure significant pain and find physical tasks impossible. The condition is interesting because pain can become worse during sedentary periods or periods of rest. This means someone who works at a desk in an office may also experience pain because their job involves little physical activity. How Long Do You Have to Live with Ankylosing Spondylitis Before You Can Apply for SSDI? Your AS diagnosis may be recent, or you may have been diagnosed years ago and just now find yourself unable to work through the pain. Whenever the diagnosis occurs, we must be able to establish that your condition is medically determined to persist for at least 12 months. Do You Need a Lawyer to Apply for SSDI Benefits? You are not required to have a lawyer to apply for SSDI benefits, but having one may significantly increase your odds of success. Applying for SSDI benefits is not easy, and you may be more likely to make mistakes or leave out crucial information and evidence if you do not have an experienced lawyer to help you. Can You Apply for SSDI if Treatment is Available for Your Ankylosing Spondylitis Condition? Yes. Even if treatments are available and help relieve your symptoms, that does not mean that everyone who receives treatment can perform substantial gainful activity. Even with treatment, you might still be unable to work, and you may apply for SSDI benefits. Ask Our Disability Attorneys for Help Applying for Benefits Begin your case with a free legal review by calling Young, Marr, Mallis & Associates at (215) 515-2954 and speaking to our disability lawyers.

Law Review (Note): Elizabeth Tsai, The Taxing Ambiguity: Defining "Return" in Bankruptcy Dischargeability Cases Ed Boltz Tue, 03/31/2026 - 16:31 Available at: https://engagedscholarship.csuohio.edu/cgi/viewcontent.cgi?article=4364&context=clevstlrev Abstract: This Note examines the circuit split over the dischargeability of tax debts tied to late-filed returns, which has led to inconsistent bankruptcy outcomes and inequitable treatment of debtors across jurisdictions. Some courts, adopting the strict “one-day-late” rule, hold that any tax return filed even a single day past its deadline is not a “return” for bankruptcy discharge purposes, permanently barring relief. Others apply a more flexible standard grounded in the Beard test, considering a debtor’s good-faith compliance efforts. This inconsistency contradicts the fresh start principle of bankruptcy law, disproportionately harms low-income debtors, and fails to serve the government’s tax collection interests. This Note argues that Congress should amend 11 U.S.C. § 523(a)(1)(B) to codify the Beard test and restore the effectiveness of the two-year rule, ensuring that bankruptcy law does not impose lifelong financial penalties for minor procedural missteps. Alternatively, the Supreme Court should establish a uniform standard, or the IRS should issue administrative guidance clarifying that a late-filed return remains valid for tax assessment and discharge purposes. A clear, consistent, and fair approach is necessary to resolve this issue and restore uniformity, predictability, and economic rationality to tax dischargeability in bankruptcy. The Taxing Ambiguity: When Is a “Return” Not a Return? Elizabeth Tsai’s recent note in the Cleveland State Law Review tackles one of the most persistent interpretive problems created by the 2005 amendments to the Bankruptcy Code: whether a late-filed tax return can ever qualify as a “return” for purposes of discharging tax debt under 11 U.S.C. § 523(a)(1)(B). The problem arises from the BAPCPA addition of the so-called “hanging paragraph,” which defines a “return” as one that satisfies “applicable filing requirements.” Courts have divided sharply on whether those requirements include timeliness. The result is a deep circuit split that leaves debtors’ ability to discharge tax debt largely dependent on geography. The Competing Approaches The Strict “One-Day-Late” Rule Several circuits have adopted a strict interpretation holding that any late return is not a return at all for bankruptcy discharge purposes. Those courts reason that: “Applicable filing requirements” include the deadline, and A return filed after that deadline fails the statutory definition. This approach is reflected in decisions such as: Fahey v. Massachusetts Department of Revenue (1st Cir.) In re McCoy (5th Cir.) In re Mallo (10th Cir.) Under this rule, missing the tax filing deadline by even one day permanently bars discharge of the associated tax debt. Critics point out the obvious statutory problem: if no late return is ever a “return,” then the Bankruptcy Code’s two-year rule for late-filed returns becomes meaningless. The Beard Test Approach Other circuits take a far more practical approach, applying the long-standing Beard test to determine whether a document qualifies as a return. Under Beard, a return must: Purport to be a return Be signed under penalty of perjury Contain sufficient information to calculate the tax Represent an honest and reasonable attempt to comply with tax law. Courts using this approach focus on substance rather than timing. Late returns may still qualify as returns so long as they represent a genuine effort to comply with tax law. The Fourth Circuit: A Middle Ground Favorable to Debtors For debtors and practitioners in North Carolina and the rest of the Fourth Circuit, the news is somewhat better. The Fourth Circuit has not adopted the harsh “one-day-late” rule. Instead, courts in this circuit generally analyze late-filed returns using the Beard framework, asking whether the filing represents an honest and reasonable attempt to comply with tax law. The leading Fourth Circuit decision is Moroney v. United States, which held that a filing made only after the IRS had already assessed the tax liability did not qualify as a return because it did not represent a genuine attempt to comply with the tax laws. While that case predates BAPCPA, courts in the Fourth Circuit continue to rely on its reasoning when analyzing late-filed returns. The practical result is that late filing alone does not automatically defeat discharge. Instead, courts generally examine questions such as: Was the return filed before the IRS prepared a Substitute for Return (SFR)? Did the filing provide the IRS with useful information to assess the tax? Did the debtor make a good-faith attempt to comply with tax obligations? If those questions are answered favorably, a late return may still qualify as a return, and the tax may be dischargeable if the other timing rules (such as the three-year and two-year rules) are satisfied. But if the debtor files only after the IRS has already completed an SFR and assessed the tax, courts in the Fourth Circuit often conclude that the filing was not a genuine attempt to comply with tax law. Why This Split Matters Tsai’s article emphasizes that this circuit split produces dramatically different outcomes for identical debtors. A taxpayer who files late returns and later seeks bankruptcy relief might: Receive a discharge in the Eighth Circuit, Possibly receive one in the Fourth Circuit, but Face permanent nondischargeability in the First or Fifth Circuits. That geographic disparity undermines one of the central goals of federal bankruptcy law: uniformity. Policy Concerns Raised by the Article The article highlights several policy problems created by the strict “one-day-late” rule. 1. It disproportionately harms vulnerable debtors Late tax filings are frequently associated with: job loss illness financial instability lack of access to professional tax assistance. Those are precisely the circumstances that lead many individuals into bankruptcy in the first place. Turning a missed deadline into a lifetime nondischargeable debt does little to advance the goals of either tax administration or bankruptcy law. 2. It discourages voluntary compliance The strict rule also produces a strange incentive. If filing late provides no benefit in bankruptcy, a taxpayer may conclude that filing late is pointless. That result is the opposite of what tax policy normally seeks to encourage. 3. It does little to increase tax collection Late filing accounts for only a small portion of the federal tax gap, meaning the strict rule produces minimal additional revenue for the IRS. Instead, it mainly generates: additional litigation inconsistent outcomes administrative costs. Proposed Solutions Tsai proposes three possible ways to resolve the circuit split. Congressional action The most direct fix would be for Congress to amend § 523(a)(1)(B) to: clarify that timeliness is not required for a filing to qualify as a return, and codify the Beard test. That approach would restore the traditional understanding of late-filed returns and give real meaning to the Code’s two-year rule. Supreme Court intervention The Supreme Court could also resolve the split by interpreting the phrase “applicable filing requirements.” However, the Court has repeatedly declined to address the issue despite the acknowledged circuit conflict. IRS administrative guidance Finally, the IRS could issue guidance clarifying that late returns remain valid returns for bankruptcy purposes. While less definitive than legislation or a Supreme Court ruling, such guidance could reduce litigation and promote uniformity. Commentary: A Statutory Problem Hiding in Plain Sight For consumer bankruptcy practitioners, Tsai’s article highlights one of the lingering problems created by BAPCPA’s drafting. The strict “one-day-late” rule is difficult to reconcile with the statute for several reasons. First, it effectively eliminates the two-year rule for late returns. If a late return is never a “return,” the statute’s explicit reference to late returns becomes meaningless. Second, it produces arbitrary geographic outcomes that undermine the uniformity of federal bankruptcy law. Third, it punishes the wrong debtors—those who eventually file returns and attempt to correct their mistakes. The Fourth Circuit’s more flexible approach—while not perfect—at least recognizes that bankruptcy law should distinguish between taxpayers who never comply and those who eventually do. Until Congress or the Supreme Court resolves the issue, however, the dischargeability of tax debts tied to late-filed returns will remain one of the most unpredictable corners of consumer bankruptcy law—and one where geography may determine whether a debtor truly receives the fresh start the Bankruptcy Code promises.-- To read a copy of the transcript, please see: Blog comments Attachment Document the_taxing_ambiguity_defining_return_in_bankruptcy_dischargeab.pdf (571.43 KB) Category Law Reviews & Studies

Law Review: Hampson, Christopher D., Bankruptcy Abstention (February 08, 2026) Ed Boltz Mon, 03/30/2026 - 15:08 Available at:  https://ssrn.com/abstract=6198338  Abstract: Courts have been finding ways to avoid hearing bankruptcy cases for a long time.  This practice distinguishes bankruptcy from other types of federal cases.  The federal district courts operate under the twin principles that they are courts of limited jurisdiction and have a “virtually unflagging” obligation to exercise it.  But those twin principles are inverted in bankruptcy.  That is because bankruptcy courts do more than just resolve disputes; they solve problems. Bankruptcy jurisdiction is expansive and dramatic.  When a debtor commences a bankruptcy case, the bankruptcy court has jurisdiction not only over the case itself and proceedings “arising in” the case, but also a broad swath of cases “related to” the bankruptcy proceedings.  Yet, unlike their district court cousins, bankruptcy courts have much broader authority to dismiss or abstain from hearing cases before them, as well as to reshape the contours of a bankruptcy case by lifting the stay or by allowing custodians to maintain control of property of the estate. Bankruptcy courts wield that authority in a host of pragmatic, equitable, and surprising ways: pulling back when the case lacks a bankruptcy purpose, policing against a range of forum-shopping practices, abstaining when other insolvency proceedings are underway, and (most strikingly) stepping back when debtors and creditors are engaged in informal, out-of-court workouts.  This Article refers to all these abstention or abstention-adjacent decisions as “bankruptcy abstention,” a mix of permissive and mandatory rules that provide contours to the jurisdiction of the bankruptcy courts by limning out bankruptcy’s “negative spaces.” This Article maps out three situations when the bankruptcy courts pull back, explores what this unusual practice tells us about bankruptcy as an area of law, suggests how bankruptcy abstention might be refined, and proposes some lessons about the nature of courts along the way.  While federalism principles can explain much of bankruptcy abstention, bankruptcy courts also pull back from re-adjudicating out-of-court workouts that they deem fair and efficient — even when the matters have not yet seen the inside of a courtroom.  Bankruptcy courts also pull back when they perceive that the tools at their disposal are a poor fit for the problem they are being asked to solve.  Bankruptcy abstention thus goes beyond federalism principles and demonstrates the character of the bankruptcy courts as courts of equity — courts that nurture what Alexander Bickel called the “passive virtues.”  The Article suggests that we can rethink some of bankruptcy’s most contentious doctrines through that lens, coins the phrase “bankruptcy ripeness,” and provides new insight into the debate over bankruptcy exceptionalism.  This reframing can, in turn, suggest guidance to attorneys, judges, and policymakers for how best to fine-tune the bankruptcy system — as well as provide lessons for other courts of equity in the American legal system.  Finally, the Article proposes that bankruptcy abstention represents a new battlefield for old debates about bankruptcy theory and suggests that bankruptcy scholars think of institutionalism as a third way of theorizing bankruptcy law.   Summary: Christopher Hampson’s article, “Bankruptcy Abstention,” explores a paradox that anyone practicing in bankruptcy court quickly learns: bankruptcy courts possess some of the broadest jurisdiction in the federal system, yet they also exercise extraordinary discretion to decline hearing cases altogether. Unlike ordinary federal courts—where judges have a “virtually unflagging obligation” to exercise jurisdiction—bankruptcy courts routinely dismiss, abstain, lift the stay, or otherwise step back when they believe bankruptcy is the wrong forum or the wrong time. Hampson argues that this pattern reflects the distinctive character of bankruptcy courts. They are not merely adjudicating disputes between parties; they are problem-solving courts, and when bankruptcy is not the right tool for the problem, judges often decline to proceed. The article identifies three primary situations where bankruptcy courts “pull back.” 1. When the Case Lacks a Bankruptcy Purpose Bankruptcy is designed to address two basic problems: debtors who cannot pay, or debtors who will not pay. When neither condition exists, courts may conclude that bankruptcy is being used for something else—often tactical litigation advantage. For example, courts have increasingly scrutinized filings by solvent debtors, particularly in large corporate restructurings. The Third Circuit’s decision in In re LTL Management illustrates the point. There, Johnson & Johnson attempted a “Texas Two-Step” restructuring, placing mass-tort liabilities into a subsidiary that then filed bankruptcy. The court dismissed the case, holding that bankruptcy requires real and immediate financial distress, not simply a strategic attempt to manage litigation. Hampson suggests that courts might better frame these cases not as bad-faith filings under §1112, but as abstention decisions under §305, which explicitly allows dismissal when the interests of creditors and the debtor would be better served outside bankruptcy. 2. When Bankruptcy Cannot Solve the Problem (Futility) Bankruptcy courts also step aside when reorganization is impossible or pointless. If a debtor has: no viable business, no meaningful assets, or no realistic prospect of confirming a plan, the court may dismiss the case rather than supervise a doomed restructuring. Futility can also arise at the asset level. When collateral is fully encumbered and not necessary for reorganization, the Bankruptcy Code requires lifting the automatic stay to allow foreclosure. When enough of the debtor’s assets fall into that category, continuing the case makes little sense. In short, if bankruptcy cannot produce a better outcome than state law remedies, the court may simply decline to host the process. 3. When Bankruptcy Is Being Used for Forum Shopping Another recurring theme is forum shopping. Courts may abstain when bankruptcy is used to evade: state court litigation, regulatory enforcement, multidistrict litigation, or other insolvency proceedings such as receiverships or assignments for the benefit of creditors. In those situations, bankruptcy judges sometimes conclude that the filing is less about restructuring debt and more about changing the playing field. 4. When the Parties Are Already Working It Out Perhaps the most surprising category arises when creditors and debtors are successfully negotiating outside bankruptcy. Courts have occasionally abstained when: a consensual workout is underway, and bankruptcy would only disrupt an efficient private restructuring. The idea is simple: if the parties are solving the problem themselves, there may be no need for the court’s intervention. Commentary Hampson’s article highlights something practitioners often sense intuitively but rarely articulate: bankruptcy courts regulate not only what happens inside bankruptcy, but also when bankruptcy should not happen at all. Several observations stand out. 1. Bankruptcy Judges Act Like Institutional Gatekeepers Unlike ordinary federal courts, bankruptcy judges routinely ask a threshold question: Is bankruptcy actually the right forum for this dispute? If the answer is no, the court may dismiss the case, abstain, lift the stay, or simply allow another forum to proceed. That flexibility reflects the hybrid nature of bankruptcy courts as both statutory courts and courts of equity. 2. Abstention Is the “Negative Space” of Bankruptcy Law Most scholarship focuses on the tools bankruptcy courts use: the automatic stay cramdown avoidance powers discharge. Hampson instead focuses on what courts do when they decline to use those tools. Those abstention decisions often shape the bankruptcy system just as much as the cases that proceed. 3. The Debate Over “Financial Distress” Is Just Beginning The most contentious modern battleground involves solvent debtor filings, particularly in mass-tort restructurings. The Third Circuit’s decision in LTL Management imposed a financial-distress requirement that does not appear explicitly in the Bankruptcy Code. Meanwhile, the Fourth Circuit recently rejected a constitutional insolvency requirement in the Bestwall asbestos case—though the issue may not be settled. Expect this debate to continue. 4. Consumer Bankruptcy Raises Different Issues Hampson focuses primarily on business bankruptcies, and that limitation is important. Consumer bankruptcy rarely presents the same abstention concerns because individuals generally cannot resolve their debts through: receiverships, assignments for the benefit of creditors, or out-of-court workouts. For most consumers, bankruptcy remains the only practical path to a discharge. Bottom Line Hampson’s article reminds us that bankruptcy courts wield not only powerful restructuring tools but also powerful brakes. They intervene when bankruptcy is necessary to resolve financial distress. But when the case is unnecessary, premature, or tactical, bankruptcy courts may simply step aside. In that sense, the real lesson of bankruptcy abstention may be this: Bankruptcy courts do not exist merely to decide cases—they exist to decide when bankruptcy itself makes sense. To read a copy of the transcript, please see: Blog comments Attachment Document bankruptcy_abstention.pdf (907.25 KB) Category Law Reviews & Studies

 Shenwick & Associates Achieves Favorable Settlement in In re Celsius Preference Avoidance Action — Default Judgment VacatedAs regular readers of this blog are aware, Shenwick & Associates has developed a recognized legal specialty in cryptocurrency-related matters, including the defense of preference avoidance actions arising out of the In re Celsius Network LLC bankruptcy proceedings.To date, our firm has successfully resolved numerous Celsius preference avoidance actions on favorable terms for defendants named in adversary proceedings. We are pleased to report a recent matter that underscores the importance of prompt legal intervention, even where a defendant's procedural posture has been significantly compromised.BackgroundOur firm was recently retained by a Celsius adversary proceeding defendant domiciled in Europe who had been sued for in excess of $660,000. Prior to retaining counsel, our client failed to respond to multiple communications from Celsius and did not file a timely Answer to the Complaint. As a result, a Default Judgment was entered against him in both the United States and in the relevant European jurisdiction.Our Representation and ResultFollowing entry and service of the Default Judgment, our client retained James Shenwick, Esq. to seek vacatur of the Default Judgment and to negotiate a resolution of the underlying claim. Our firm promptly moved to vacate the Default Judgment, filed a responsive Answer to the Complaint, and engaged in substantive settlement negotiations with opposing counsel.We are pleased to announce that the matter was resolved for approximately 8% of the original claim amount — a result that represents an extraordinary outcome given the procedural posture of the case at the time of our retention. Notably, the client was also able to fund the settlement using cryptocurrency, providing additional flexibility in satisfying the agreed-upon terms.Contact Shenwick & AssociatesIf you have been named as a defendant in a Celsius preference avoidance action — whether you have already received a Default Judgment or have simply been served with a Complaint — we strongly urge you to contact our office promptly. Delay can have significant legal and financial consequences.James Shenwick, Esq.Shenwick & Associates📞 917-363-3391✉️ jshenwick@gmail.comTo schedule a telephone consultation, please click the link below:🔗 Schedule a Call with James Shenwick, Esq.Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15Shenwick & Associates counsels individuals and businesses confronting significant debt obligations, as well as creditors navigating bankruptcy proceedings.

4th Cir.: Tederick v. LoanCare, LLC- Consumer Protection Claims Under WVCCPA Are Strict Liability — Intent Not Required Ed Boltz Fri, 03/27/2026 - 14:14 Summary: In Tederick v. LoanCare, LLC, the Fourth Circuit vacated a summary judgment ruling that had dismissed a consumer class action against mortgage servicer LoanCare under the West Virginia Consumer Credit and Protection Act (WVCCPA). The appellate court held that the statute imposes strict liability, meaning that a borrower does not need to prove the servicer intended to violate the law. The decision sends the case back to the Eastern District of Virginia for further proceedings — and it provides an important clarification of how broadly consumer-protection statutes should be interpreted. The Facts: A Familiar Mortgage Servicing Problem Gary and Lisa Tederick refinanced their West Virginia home in 2004 and made regular mortgage payments for years. Like many conscientious borrowers, they often sent extra principal payments along with their monthly payment. Their note required that: payments be applied first to interest, then principal; but prepayments reduce principal once the borrower was current. Between 2005 and 2020, the Tedericks made roughly 180 combined payments that included both the scheduled payment and additional principal. But the servicers — including LoanCare — allegedly misapplied the prepayments, failing to reduce principal when they should have. The result: the borrowers claim they were charged excess interest for years. After attempts to correct the problem failed, the Tedericks paid off the loan in 2020 and then filed a putative class action alleging violations of the WVCCPA. The District Court: “Being Wrong Isn’t Enough” The district court granted summary judgment for LoanCare. Its reasoning was straightforward: Even if LoanCare misapplied the payments, the court believed the WVCCPA required proof that the servicer intentionally used fraudulent or deceptive conduct to collect a debt. Since the record showed, at most, a billing error, the court concluded the statute was not violated. In short, the district court treated the statute as if it required proof of intent to deceive. The Fourth Circuit: That’s Not What the Statute Says The Fourth Circuit disagreed — emphatically. Looking at the language of W. Va. Code §§ 46A-2-127 and 46A-2-128, the court concluded the statute does not require proof of intent. Instead, the provisions prohibit: false representations about the amount or status of a debt, and collecting interest or fees not authorized by agreement or law. Nothing in the statutory text requires that the debt collector intended the violation. Accordingly, the court held: The provisions are strict liability statutes requiring only proof that the violation occurred. The district court’s insertion of an intent requirement was therefore legal error. Legislative Purpose: Protect Consumers, Not Debt Collectors The Fourth Circuit also emphasized the remedial purpose of the WVCCPA. West Virginia’s high court has repeatedly held that the statute must be liberally construed to protect consumers from unfair and deceptive practices. If courts required proof of intent, the panel noted, the statute would lose much of its force. Indeed, the legislature included intent requirements elsewhere in the Act when it wanted them — but not in these provisions. That textual difference mattered. LoanCare’s Curious Appellate Strategy One of the more striking aspects of the opinion is the Fourth Circuit’s pointed commentary on LoanCare’s litigation posture. Before the district court, LoanCare argued vigorously that the statute required intent. On appeal, however, the company attempted to abandon that argument entirely and defend the judgment on different grounds. The panel called this move “perplexing,” noting that LoanCare appeared to have effectively “thrown the district judge overboard.” The Fourth Circuit refused to play along. What Happens Next The Fourth Circuit declined to resolve two additional issues raised by LoanCare: Whether the servicer actually misapplied the payments, and Whether LoanCare might be protected by the bona fide error defense. Because those questions were not resolved below, the case returns to the district court for further proceedings. Why This Case Matters This opinion reinforces several themes that appear again and again in consumer-finance litigation. 1. Consumer protection statutes often impose strict liability Just like the FDCPA, many state statutes are written so that a violation is enough — intent is irrelevant. Servicers and collectors cannot defend violations simply by claiming the error was accidental. 2. Mortgage servicing errors can become systemic The facts here are painfully familiar: borrower sends extra principal servicer misapplies payment interest continues to accrue borrower overpays for years Those “simple billing errors” can quietly generate large amounts of extra interest. 3. The bona fide error defense still matters Strict liability does not mean automatic liability. Debt collectors can still escape liability if they prove: the violation was unintentional, and they maintained procedures reasonably adapted to prevent it. But importantly, that is an affirmative defense — not an element the consumer must prove. Bankruptcy Angle: Why Debtors’ Lawyers Should Care Although this case arises outside bankruptcy, the reasoning will resonate with consumer bankruptcy practitioners. Mortgage servicers frequently appear in bankruptcy cases with payment histories riddled with the same kinds of accounting issues: misapplied principal payments improperly assessed interest or fees incorrect payoff calculations When those errors spill into Rule 3002.1 disputes, stay violations, or adversary proceedings, the same principle often applies: The servicer’s intent usually does not matter. If the numbers are wrong — and the borrower paid too much — liability can follow. Bottom Line The Fourth Circuit’s decision in Tederick v. LoanCare restores the straightforward rule the statute intended: If a debt collector charges interest or misrepresents the amount of a debt, it may violate the WVCCPA even if the mistake was unintentional. For consumers — and their lawyers — that is a significant clarification. For servicers, it is a reminder that “billing errors” can carry real legal consequences. To read a copy of the transcript, please see: Blog comments Attachment Document tederick_v._loancare.pdf (293.52 KB) Category 4th Circuit Court of Appeals

Law Review (Economics): Goss, Jacob and Mangum, Daniel- Liberty Street Economics- Sports Betting Is Everywhere, Especially on Credit Reports Ed Boltz Thu, 03/26/2026 - 14:33 Available at: https://libertystreeteconomics.newyorkfed.org/2026/03/sports-betting-is-everywhere-especially-on-credit-reports/ Summary (Liberty Street Economics + NY Fed Staff Report) The Federal Reserve’s analysis confirms what many consumer bankruptcy attorneys have been seeing anecdotally: legalized sports betting is not just entertainment—it is increasingly showing up as measurable financial distress. Start with the scale. Since Murphy v. NCAA, more than 30 states have legalized mobile sports betting, generating over $500 billion in wagers. Legalization causes sportsbook spending to increase roughly tenfold, driven not by existing bettors gambling more, but by new participants entering the market. But the most important—and troubling—finding is what happens next: Only ~3% of the population takes up betting after legalization, but Delinquencies increase across the entire population, by about 0.3 percentage points, and Among the actual bettors, the implied increase in delinquency is roughly 10 percentage points—essentially doubling baseline distress. And this is not confined neatly within state lines. Because betting requires only physical presence (not residency), there are significant cross-border spillovers: Nearby “illegal” counties experience about 15% of the increase in betting activity, and Nearly 60% of the increase in delinquency seen in legal states. In other words: the financial harm spreads more efficiently than the betting itself. The credit impacts are not evenly distributed. The data show that: Younger borrowers (under 40) drive most of the deterioration With notable increases in credit card and auto loan delinquencies Credit scores decline modestly, but delinquency rises more meaningfully over time The Liberty Street piece distills this bluntly: sports betting is now “everywhere,” and increasingly, it is “on credit reports.” Commentary: If this feels familiar, it should. Bankruptcy lawyers have seen this movie before—just with different props: Payday loans in the 2000s Title lending and subprime auto in the 2010s And now, sports betting apps with push notifications and instant deposits The difference this time is friction. Or rather, the complete lack of it. You no longer need to drive to a casino, walk past a row of blinking machines, and make a conscious decision to gamble. Instead: Your phone buzzes You tap You deposit (often on credit) And you chase losses in real time That is not just gambling—it is high-frequency, algorithmically nudged financial behavior. And the data confirms what behavioral economics would predict: a small percentage of users drive outsized harm, but the system-wide impact shows up in delinquency, not winnings. What This Means for Bankruptcy Filings Expect this to become a quiet but meaningful driver of filings, particularly in Chapter 13: Credit Card Load-Up + Cash Advance Cycling Many debtors will fund betting through revolving credit, leading to rapid utilization spikes and eventual default.   Auto Loan Defaults (especially subprime) The data already shows rising auto delinquencies. That is a pipeline straight into repossession and subsequent bankruptcy.   Younger Debtors Entering the System Earlier The under-40 cohort is disproportionately affected—meaning earlier financial collapse and longer lifetime credit impairment.   “Unexplained” Budget Failures in Chapter 13 Trustees and practitioners will increasingly encounter plans that fail not because of income loss, but because of ongoing gambling leakage.   Potential Litigation Angles Unfair/deceptive practices (targeted marketing, inducements) Credit extensions tied to gambling platforms Data-driven nudging that may begin to resemble predatory lending dynamics How the Bankruptcy System Should Prepare This is where things get practical—and where the system is currently behind. 1. Intake and Screening Must Evolve We need to start asking directly: “Do you use sports betting apps?” “How often?” “How are you funding it?” Because otherwise, this shows up later as “mysterious budget shortfalls.” 2. Trustee and Court Awareness Chapter 13 trustees should be alert to: Repeated post-petition overdrafts Unexplained disposable income gaps Payment instability tied to seasonal betting cycles (NFL season spikes are real, per the data) 3. Treatment: This Is Not Just ‘Bad Choices’ Gambling disorder is a recognized behavioral addiction. That means: Referral pathways to gambling counseling (analogous to credit counseling) Integration with mental health and addiction treatment Possibly even conditions in plans where appropriate (carefully, and with due regard for feasibility) 4. Means Test and Disposable Income Questions There is an unresolved tension here: Are gambling losses “reasonably necessary expenses”? (No.) But what about treatment costs? (Much stronger argument under § 707(b)(2)(A)(ii) and § 1325(b)) Expect litigation eventually on how to treat both. 5. Policy Level: The Externality Problem The Fed paper highlights a classic issue: States that don’t legalize still bear the bankruptcy and credit fallout, but get none of the tax revenue. That is a recipe for: Continued expansion of legalization Without corresponding investment in consumer protection or treatment infrastructure Final Thought The most striking statistic is not the tenfold increase in betting. It is this: a 3% participation increase produces a system-wide deterioration in credit performance. That is the hallmark of a product that: Concentrates harm Spreads consequences And hides in plain sight—until it shows up in bankruptcy schedules Bankruptcy practitioners should treat this not as a curiosity, but as the next wave of consumer financial distress—one that is faster, more digital, and more psychologically engineered than anything that came before. To read a copy of the transcript, please see: Blog comments Attachment Document sports_betting_is_everywhere_especially_on_credit_reports_-_liberty_street_economics.pdf (1.52 MB) Document sports_betting_across_borders_spatial_spillovers_credit_distress_and_fiscal_externalities.pdf (9.39 MB) Category Law Reviews & Studies