Articles Posted in Bankruptcy

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Defendants were creditors of Plaintiff who obtained final judgments against Plaintiff. A levy of execution was made on Plaintiff’s real property. Plaintiff subsequently received a discharge under Chapter 7 of the Bankruptcy Code. Plaintiff did not seek or obtain a ruling from the Bankruptcy Court avoiding any of Defendants’ liens. Thereafter, Plaintiff filed a complaint to remove the judicial liens. The judge entered judgment in favor of all three defendants, including two defaulting defendants, ruling that Defendants’ liens remained. The Supreme Judicial Court affirmed, holding that Defendants’ liens survived the bankruptcy discharge as a matter of federal and state law. View "Christakis v. Jeanne D’Arc Credit Union" on Justia Law

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Plaintiffs refinanced their home in a mortgage loan transaction with Summit Mortgage. The mortgage was later assigned to Defendant, SunTrust Mortgage, Inc. Facing foreclosure, Plaintiffs filed for Chapter 13 bankruptcy. Plaintiffs filed an adversary proceeding against SunTrust in the pending bankruptcy case, seeking rescission of the loan transaction and damages. SunTrust filed a motion for summary judgment, arguing that because Plaintiffs filed their adversary complaint more than four years after the mortgage loan transaction, the defensive rescission-by-way-of-recoupment claim was barred by section 10(f) of the Massachusetts Consumer Credit Cost Disclosure Act (“MCCCDA”). In response, Plaintiffs asserted that the four-year statute of limitations did apply to their action because section 10(i)(3) of the MCCCDA allows for recoupment claims at any time. The United States Bankruptcy Court for the District of Massachusetts certified a question of law to the Massachusetts Supreme Judicial Court, which answered by holding that a borrower who grants a mortgage in a consumer credit transaction may not rescind the transaction under the MCCCDA defensively by way of common law recoupment after the expiration of the statute of limitations set forth in section 10(f) of the MCCCDA.View "May v. Suntrust Mortgage, Inc." on Justia Law

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Kenneth Wynne and Allison Wynne owned and operated Wynne Fine Art, which accepted art works from creditor artists. After the Wynnes filed for bankruptcy, the trustee of the bankruptcy estates moved to sell the art works. The creditor artists commenced an adversary proceeding against the bankruptcy estate seeking a declaration that the art works were held in trust under the Massachusetts fine art consignment statute, Mass. Gen. Laws, ch. 104A, 2(b), and therefore were not the property of the bankruptcy estates. The trustee counterclaimed seeking a declaration that chapter 104A was inapplicable because when the creditor artists delivered their work to the gallery they did not provide a written statement describing the art work as required by chapter 104A, section 2(b). The United States Bankruptcy Court for the District of Massachusetts certified a question of law to the Supreme Judicial Court concerning the effect of a consignor’s failure to deliver a written statement pursuant to chapter 104A, section 2(b). The Supreme Judicial Court answered that a written statement of delivery is not a prerequisite for the formation of a consignment under chapter 104A. View "Plumb v. Casey" on Justia Law

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In a proceeding under Chapter 7 of the Bankruptcy Code, a question arose concerning the application of the Commonwealth's homestead protection statute, G.L.c. 188, section 1, to a beneficiary of a trust. Finding no controlling precedent in the court's decisions, the Bankruptcy Court judge certified the following question: "May the holder of a beneficial interest in a trust which holds title to real estate and attendant dwelling in which such beneficiary resides acquire an estate of homestead in said land and building under G.L.c. 188, section 1?" The court confined its answer to the 2004 version of the homestead statute and answered the certified question in the negative. The court rejected the debtor's claims and concluded that even though the debtor resided in the Lowell property and used it as her home, as the owner of a fifty percent beneficial interest in the trust that holds to the property but who did not direct or control the trustee, she could not validly claim a homestead exemption for the property under the 2004 act. View "Boyle v. Weiss" on Justia Law