"RECENTLY FILED AMICUS BRIEFS." and "OTHER NEWS" -- From the National Association of Consumer Bankruptcy Lawyers


Exemption for Inherited IRA
NACBA has filed an amicus brief in the case ofIn re Chilton, No. 11-40377 (5th Cir.). That case addresses the issue of whether a debtor may exempt an inherited IRA from his bankruptcy estate. NACBA's brief relies on the plain language of the Code and refutes the trustee's policy arguments as contrary to Congress's chosen language and unsupported by legislative history and intent. This case is one of several such cases in which NACBA is involved, as the issue appears to be arising with greater frequency across the nation. Other cases are: Bierbach v. Tabor, No. 10-4660 (3rd Cir.) (NACBA brief not yet filed) and In re Hamlin, No. 11-1083 (9th Cir. BAP) (NACBA brief filed and available through website). Chilton is the first case to reach the briefing stage at the U.S. Court of Appeals level.

Absolute Priority Rule in Chapter 11
NCBRC's Tara Twomey has filed an amicus brief on behalf of NACBA in the case of In re Friedman, No. 11-1149 (9th Cir. BAP) arguing that the absolute priority rule in chapter 11 does not apply to individual debtors. NACBA's brief argues that when Congress enacted the 2005 amendments it made significant amendments to chapter 11 in order to steer debtors toward reorganization rather than liquidation. Application of the absolute priority rule would have the contrary effect. This case presents one of the first opportunities for an appellate court to address whether the 2005 amendments to the Code abrogate the absolute priority rule for individuals. Other cases addressing this issue that are currently in the courts include: In re Maharaj, No. 11-217 (4th Cir.); In re Kamell, No. 11-1246 (9th Cir. BAP); In re Stephens, No. 11-29 (10th Cir. BAP); and In re Cobb, No. 09-25620 (Bankr. C.D. Cal.)

Constitutionality of Bankruptcy Specific Exemptions
In In re Schafer, No. 11-1340 (6th Cir.) NACBA filed an amicus brief addressing the constitutionality of Michigan's bankruptcy specific exemption scheme. NACBA's brief argues that section 522(b)(3)(A) of the Bankruptcy Code permits the states to enact whatever exemption laws deemed appropriate without regard to whether those laws are limited to bankruptcy debtors or applicable to all debtors in the state. Joining in the amicus brief were the National Consumer Law Center, Legal Services Association of Michigan, The Michigan Poverty Law Program and the Council of the Consumer Law Section of the State Bar of Michigan.


9th Circuit Upholds Court Mandated Amendment to Creditor's Monthly Statement In a long-awaited decision, the Ninth Circuit, in Home Funds Direct v. Monroy, No. 10-60005, has ruled that a court-authorized addendum to a chapter 13 plan altering what must be included in a mortgagee's monthly statements does not violate the separation of powers clause of the constitution and was consistent with the purpose and requirements of RESPA. The court further found that freedom from reporting requirements was not a "right" protected from modification by section 1322(b)(2). NACBA's amicus project assisted on the debtor's brief.

Negative Equity Issue Reaches Supreme Court
When the 9th Circuit found that negative equity on a trade-in vehicle was not part of the purchase money security interest subject to the hanging paragraph of section 1325(a), it created a split among the U.S. Courts of Appeals. That issue is now before the Supreme Court in the case of AmeriCredit Financial Services v. Penrod, No. 10-1443. NCBRC's Amicus Project will assist debtor's counsel in opposing certiorari."

To learn more please visits the National Association of Consumer Bankruptcy Lawyers at www.NACBA.org