Supreme Court Consumer Bankruptcy Update

On December 12, 2014, the Supreme Court released an order granting petitions for certiorari in two more consumer bankruptcy cases:

This update is from Robin Miller who provides bankruptcy consumer law updates to attorneys.

Bullard v. Hyde Park Savings Bank, Case No. 14-116 (U.S. Sup. Ct., pet. for cert. granted Dec. 12, 2014)

The Supreme Court  granted the Chapter 13 debtor’s petition for certiorari seeking review of In re Bullard, 752 F.3d 483 (1st Cir. May 14, 2014), which held that a bankruptcy court order denying confirmation of a proposed Chapter 13 plan, and giving the debtor an opportunity to file an amended plan, was not a final appealable order.

Harris v. Viegelahn, Case No. 14-400 (U.S. Sup. Ct., pet. for cert. granted Dec. 12, 2014)

The Supreme Court  granted the Chapter 13 debtor’s petition for certiorari seeking review of In re Harris, 757 F.3d 468 (5th Cir., July 7, 2014), which held, in disagreement with In re Michael, 699 F.3d 305 (3rd Cir., Oct. 26, 2012), that when a Chapter 13 debtor converts to Chapter 7 after the confirmation of a plan, undistributed plan payments held by the Chapter 13 trustee should be distributed to creditors in accordance with the debtor’s plan rather than returned to the debtor.

Additionally, as discussed in a prior post, the Supreme Court will be deciding whether junior liens can be stripped off in chapter 7 cases. This remains the key issue for consumer debtors before the Supreme Court this term.  There are now two cases that the Supreme Court has consolidated to determine this issue.

Bank of America, N.A. v. Caulkett, Case No. 13-1421 (U.S. Sup. Ct., pet. for cert. granted Nov. 17, 2014)

The Supreme Court has granted the mortgage creditor’s petition for certiorari to review In re Caulkett, 566 Fed. Appx. 879 (11th Cir., May 21, 2014) (case no. 14-10803), which held that, under In re McNeal, 735 F.3d 1263 (11th Cir., May 11, 2012), a Chapter 7 debtor may strip a wholly-unsecured lien.

Bank of America, N.A. v. Toledo-Cardona, Case No. 14-163 (U.S. Sup. Ct., pet. for cert. granted Nov. 17, 2014)

The Supreme Court has granted the mortgage creditor’s petition for certiorari to review In re Toledo-Cardona, 556 Fed. Appx. 911 (11th Cir., May 15, 2014), which held that, under In re McNeal, 735 F.3d 1263 (11th Cir., May 11, 2012), a Chapter 7 debtor may strip a wholly-unsecured lien.

Bank of America, N.A. v. Caulkett, above, presents the same issue; the two cases have been consolidated for argument.



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