1. NEW DEVELOPMENTS AND
TRENDS IN BANKRUPTCY

2. REVIEW
Nationally, prior to BAPCPA, 50% of those filing a consumer case had filed a previous case, 65% had filed a case within the preceding year
30% had filed one case
10% had filed two cases
10% had filed more than two cases

3. Eastern District Trends in Filings
Year
Total cases
Chapter 7
Chapter 13
13/7
Ratio
1990
4,974
3,685
1,105
30%
2001
10,113
6,881
3,159
46%
2004
9,658
6,499
3,230
50%
2008
3,217
1,608
1,570
98%
2009*
4,192
2,305
1,830
79%
* Estimated based on figures through 9/30/09

4. Year
Chapter 11 filings
Adversaries
1990
183
314
2001 73
549
2004 50
236
2008 38
132
2009* 56
175
* Estimated based on filing through 9/30/09

5. Size of Commercial Filings in Assets
Year /
Total 11 Filings
0-50,000
50, ,000
100, ,000
500,
1,000,000-10M
10M-100M
2006/ 68 53 2 1 4 6
2007/ 43 5 19 3 9
2008/ 30 17
2009/38* 8 15
* Through 9/30/09

6. Success Rates
Year
Conf
DSM’d
w/o Conf
w/in 365 days
> 365 but <730 days
>730 days
Completed/ Pending
Conv
2004
78%
56%
20%
66%
26% 8%
42% 2%
2005
71%
49%
50%
22%
12%
25%
2006
73%
80%
69% 6%
8%/ 59%
2007
79%
31%
54%
77% 1%
3%/ 69% 5%
2008
33%
65%
21%
n/a
3%/67%

8. Effective December 1, 2009
New time limits will apply to:
All pending actions unless infeasible or unjust.
If infeasible or unjust, apply the former rule.
Rules Enabling Act, 28 U.S.C. 2074

13. Hanging Paragraph Claims on a Vehicle
Chrysler v Miller, 570 F.3d 633 (5th Cir. 2009)
Secured lender retains the right to file a deficiency claim after surrender or foreclosure of a 910 vehicle.
In re Dale, 2009 WL (5th Cir. 2009)
Creditor’s claim for negative equity included in a PMSI claim on a 910 vehicle did not destroy the nature of the claim. Negative equity was a “cost of acquiring the vehicle” and therefore a PMSI debt.

14. Changes to Exemptions
Act 201- Effective June 30, 2009
Increases Homestead Exemption to $35,000
Extends protection to proceeds of insurance paid for damage to property after governor declares a natural disaster
Limits creditor with a judgment on consumer credit card debt from seizing
Judgment creditor may record judgment and a judicial lien is created. However, damages may be obtained if the property is seized an sold.

15. Pending changes to proofs of claim
Rule 3001
New requirements :
Escrow Account Statement
Amount necessary to cure default
Failure to attach may result in sanctions including attorneys fees and expenses

16. What format does the Escrow Statement take?
In accordance with RESPA

17. Escrow charges Amt Date paid Mo amt Mos to petition date Total
Hazard Ins $A X/X/XX A/12=M X/X/XX-Petition date=N M*N
Flood Ins $B X/X/XX B/12=O X/X/XX-Petition date=P O*P
Taxes $C X/X/XX C/12=Q X/X/XX-Petition date=R Q*R
Total S T
The two (2) months worth of escrow payments allowed under RESPA are calculated:
[(A + B + C)/12 ] x 2 = U
U + T = Catch Up Escrow Payments
The actual escrow balance on petition date minus the Catch Up Escrow Payments (U + T) = escrow balance on proof of claim
The debtor’s postpetition escrow account should begin with a balance equal to the Catch Up Escrow Payments (U + T).
S = new monthly postpetition escrow payment added to postpetition installments of principal and interest

18. Debtor or third party has one year to challenge
Rule
Requires written notice to debtor, debtor’s attorney and trustee of any change in the monthly amount due on a home mortgage debt at least 30 days prior to the effective date of the change
Requires written notice of the assessment, postpetition, of any fee or charge against a debtor’s account to debtor, debtor’s counsel and trustee within 30 days.
Debtor or third party has one year to challenge
Trustee must send Notice of Final Cure within 30 days of the last payment
Creditor has 21 days to Object
Court must hold a hearing on the Objection within 30 days

19. Pitfalls for the unwary:
Failure to include missed escrow payments in the proof of claim
See Campbell v Countrywide, 2008 WL (5th Cir. 2008)
Double dipping-inclusion of missed escrow payments in the proof of claim and collection of past due escrow postpetition through increased monthly payments
See In re Fitch, 390 B.R. 834 (Bankr.E.D. La. 2008)
Sheriff’s costs/ deposits
Upcharges for third party expenses, i.e. inspection fees, BPO or appraisal costs
Proper application of payments
See In re Jones, 366 B.R. 584 (Bankr.E.D. La. 2007)
In re Stewart, 391 B.R. 327 (Bnkr.E.D. La. 2008)

20. Truth in Lending
Changes effective October 1, 2009
Section c(i) & (ii)-Servicing
No servicer shall fail to credit a payment as of the date of receipt
Impose a late fee or delinquency charge when only attributable to late fees or delinquency charges assessed on an earlier payment
See