Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Showing 5 posts in Bankruptcy.

Debtor Doral Financial Corp and Its Creditors Seek Declaratory Judgment for Validity of $889 Million Tax Deal With Puerto Rico Secretary of Treasury

Earlier this year, Debtor Doral Financial Corp. had filed a voluntary Chapter 11 bankruptcy petition with the U.S. Bankruptcy Court for the Southern District of New York, Case No. 15-10573, weeks after its wholly owned subsidiary, Doral Bank Puerto Rico, which had a mortgage lending and retail banking business, was closed by regulators and the Federal Deposit Insurance Corporation was appointed as receiver for Doral Bank. Doral Bank’s failure was a result of years of financial losses and economic turmoil and was the largest bank failure since 2010.  Read More ›

First Circuit Considers Whether Student Loan Debt May Be Dischargeable Through Bankruptcy

A case pending before the Court of Appeals for the First Circuit could upend the established rules for paying off student loans. In Murphy v. Dep’t of Educ., et al., no. 14-1691, plaintiff-appellant Robert Murphy principally alleges that the trial court erred in concluding that the plaintiff-appellant’s student loan repayment would not constitute an “undue hardship” under the relevant portion of the Bankruptcy Code. If the First Circuit agrees with Mr. Murphy, certain student loan debt currently excluded from discharge through bankruptcy could become dischargeable, and lenders could be left holding the bag. Read More ›

Supreme Court Holds Chapter 7 Debtors Cannot Discard Junior Liens That Are Underwater

The U.S. Supreme Court decided on Monday, June 1, 2015, that Chapter 7 debtors may not rid themselves of second-mortgage liens in cases where, at the time of the bankruptcy, the first mortgage is undersecured. The decision reverses two Eleventh Circuit rulings that would have made such liens disappear under Section 506(d) of the Bankruptcy Code.  Read More ›

Supreme Court Holds Bankruptcy Court’s Denial of Confirmation of Proposed Plan Not Final, Appealable Order

In an opinion issued today, the Supreme Court held that debtors do not have the right to immediately appeal a bankruptcy court’s decision denying confirmation of a proposed reorganization plan. This decision resolves a circuit split, and confirms the balance of power between debtors and creditors in the plan confirmation process. As the Supreme Court explained, “the knowledge that [a debtor] will have no guaranteed appeal from a denial should encourage the debtor to work with creditors and the trustee to develop a confirmable plan as promptly as possible.” Read More ›

Third Circuit Says Technical Procedural Slip-Up in Bankruptcy Proceeding Is Grounds for FDCPA Claim

A recent Third Circuit reversal paves the way for Fair Debt Collection Practices Act (FDCPA) lawsuits based on minor procedural mishaps in bankruptcy court.  This contradicts the law in the Second and Ninth Circuits and in many district and bankruptcy courts that previously have found that participation in bankruptcy proceedings is not an attempt to collect a debt and thus not grounds for an FDCPA claim.    Read More ›