Creditors, beware: juries find new basis for award; an $11 million verdict for collection abuse alarms some: it was based not on consumer law, but on common law
Article Abstract:
A Texas District Court's $11mil verdict in favor of a debtor in Driscoll v. Household Credit Services, Inc., should be a warning to creditors across the US that their collection practices cannot be abusive. Of note is the decision's basis on common-law theories and the fact that no physically abusive collection practices were alleged. The coomon law causes of action included tortious breach of contract and fraud. Creditors should be knowledgeable about state law where they do business because much state law on collection activity pertains to them in additions to the federal Fair Debt Collection Practices Act.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1996
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Secured creditors benefit from Dewsnup
Article Abstract:
Secured creditors won a battle in Dewsnup v Timm. The US Supreme Court refused to let a debtor strip down a lien on its property to the judicially determined property value. Such a 'stripdown' would have denied secured creditors any share in the property's appreciation since the bankruptcy court valued it according to Bankruptcy Code 506(a). Chapter 7 debtors will now no longer be able to redeem property securing a claim by paying over the judicially determined value of the property.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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Dissent over rent can cost creditor; the issue is whether post-petition rent payments to an undersecured creditor will reduce its secured or its unsecured claim
Article Abstract:
Courts are split over whether a debtor's post-petition rent payments to an undersecured creditor should reduce the secured or the unsecured portion of the claim when these payments exceed the decline in the collateral's value. Most courts apply the excess payments to the unsecured portion. Thus, payments made after petitioning under Chapter 11 are subtracted from the total claim, resulting in a higher overall payment to the creditor.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1996
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