Foreclosure and Bankruptcy
The 9th Circuit BAP Court determined that the mortgage lender who purchased the foreclosed real property before the former owner had filed bankruptcy, violated the automatic stay in a Ch. 13 case by physically removing the debtor and also by changing the locks. The Court found that the debtor still had a possessory interest in the residence. As a result, the mortgage lender faces damages. In re Perl ,(9th Cir.BAP (Cal.)),
Obligation to Repay Private University for Tuition Credit Dischargeable
Private University’s agreement for promissory notes in exchange for receiving tuition credits did not equate to an obligation to repay funds since their was not transfer of funds between the parties. Therefore, the debt did not stem from 11 U.S.C.A. 523(a)(8)(A)(ii) and was also not classified as educational funds insured or guaranteed by the U.S. Government or nonprofit institutions under 523(a)(8)(A)(i). As a result, the debt was dischargeable in bankruptcy. In re Christoff ,(Bkrtcy.N.D.Cal.)
Debt to Investor Not Dischargeable because of False Representation
Investor’s $150,000 is not subject to discharge based on debtor’s false representations to investor that he was an experienced and and successful real estate developer (he was not), and the development would only take 10 months to complete before repayment was made. A Chapter 7 debtor’s obligation to an investor that he convinced to invest $150,000 into a home construction project, on the false representation that, despite having just recently obtained his contractor’s license, he was a successful and experienced real estate developer, and that it would take only ten months to complete the project and for the investor to obtain a return of his investment. Debtor had not even finished soil samples within that time frame. The Court found that debtor acted with at least reckless indifference. The project that was not completed until four years later and worth less than the encumbrances against it. In re Sato ,(Bkrtcy.C.D.Cal.)
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