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Claim Against Furnisher Fails Unless dispute made


Flax v. Navient Solutions, Inc., 2017 WL 1153889 (March 28, 2017 D. MD.) Judge Marvin J. Garbis Plaintiff checked his credit report and learned that his father had taken out three separate loans from Navient Solutions, Inc. In his name, without knowledge or consent of the Plaintiff by forging his signature. Included in the Plaintiffs Complaint was a Count for violation of the Fair Credit Reporting Act, Section 1681s-2(b). Under this section, those who furnish information to the credit reporting agencies have a responsibility to investigate the accuracy of reported information upon notice of a dispute. The Court cites the 4th Circuit opinion in Johnson v. MBNA Am. Bank, NA, 357 F.3d 426, 431 (4th Cir. 2004), which held that 1681s-2(b)(1) requires creditors, after receiving notice of a consumer dispute from a credit reporting agency, to conduct a reasonable investigation of their records to determine whether the disputed information can…Read More

Failure to pay mortgage does not releive mortgage companies of responsibilities under FCRA


Mohamed v. Select Portfolio Servicing, Inc., et al, 215 F.Supp.3d 85 (Dist. D.C.) Mortgage was transferred among various servicers and various holders over the course of its life. The consumer/mortgagor, Mr. Mohamed, requested confirmation from his various servicers that they were entitled to payment on the note. Mr. Mohamed eventually stopped paying on the note (in fact, he didn’t make a payment for over five years), stating that his current servicer, EMC, had failed to establish it was the holder of the Note. Mr. Mohamed filed disputes with the credit reporting agencies (CRA’s) to dispute the delinquent reporting of the mortgage account. Chase, who was now the servicer, verified the account as accuratately reported as delinquent from April 2011 forward. After the dispute was sent, Chase sent a letter to Mr. Mohamed that Select Portfolio Servicing (SPS), Inc would be his new loan servicer. Mr. Mohamed again disputed the negative reporting of…Read More

Lost in Bank’s Computer System: Violation of Discharge Injunction


Zombro v. SunTrust; AP No. 06 – 1166; April 14, 2008 This case involved a credit card account and a deed of trust at SunTrust bank. The first legal issue the court addressed was whether or not the debtor would be allowed to amend their complaint against the bank. To this the court decided that “Under the notice pleading approach adopted in Federal Rule of Bankruptcy Procedure 7008, the bank had sufficient notice both of the claim (violation of the discharge injunction) and the remedy (attorney’s fees) sought by the debtors as well as supporting allegations of fact. See Fed.R.Civ.P. 8(a)(2), made applicable by Fed.R.Bankr.P. 7008(a); Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007) (“Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.’”) (internal quotation marks and citations omitted).” The…Read More

No excuse not to have credit counseling course


In re Houston; Case No. 08-11848; April 11th, 2008 The debtor in this case filed a Chapter 13 without yet having the necessary credit counseling certificate. Instead of this certificate, she filed a certification of exigent circumstances stating that she will be evicted without the court’s protection. The court cites Bankruptcy Code §109(h)(3)(A) which allows the credit counseling requirement to be waived if the debtor submits to the court a certification that (1) “describes exigent circumstances that merit a waiver” of the credit counseling requirement; (2) “states that the debtor requested credit counseling services from an approved nonprofit budget and credit counseling agency, but was unable to obtain the services . . . during the 5-day period beginning on the date on which the debtor made that request,” and (3)”is satisfactory to the court.” Id. The court reasons that though an impending eviction would generally qualify as an exigent circumstance,…Read More

Bankruptcy and Virginia Corporate Law


In re Cummings; Case No. 07-13758-SSM; April 10th, 2008 Lawsuit brought in bankruptcy case highlights core aspects of Virginia corporate law Individual debtor filed a Chapter 11 under the bankruptcy code to reorganize her debts. The debtor then brought an action for breach of contract arising from the sale of a business, a declaratory judgment that salary repayment and non-compete provisions in an employment agreement she signed are unenforceable, and damages for breach of fiduciary duty. The court restated the standard for summary judgment that it was going to use. Importantly, the court noted that “the Supreme Court has held that a plaintiff need not plead evidence sufficient to establish a prima facia case in order to survive a motion to dismiss, but under Rule 8(a), need only give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Swierkiewicz v. Sorena NA,…Read More

Notice of Bankruptcy Case


In re US Airways, Inc.; Case No. 04-13819-SSM; March 27th, 2008 In a chapter 11 case, a debtor that continues in business following confirmation of a plan or reorganization is discharged from all debts arising prior to confirmation. 11 U.S.C. § 1141(d). However, before such a claim can be discharged, creditors must be afforded adequate notice of the bankruptcy case, as well as of the deadline set for filing claims against the debtor. Zurich American Ins. Co. v. Tessler (In re J.A. Jones, Inc.), 492 F.3d 242, 249(4th Cir. 2007). They type of notice that is required depends on whether a creditor is “known” or “unknown.” Creditors whose identities are actually known to the debtor or are reasonably ascertainable by the debtor are deemed to be “known creditors” and are entitled to actual notice of the bankruptcy filing. An “unknown creditor,” by contrast, is one whose identity or claim is…Read More

Who Can File Pleadings for Debtor?


In re Carr; Case No. 05-11697-RGM; March 19th, 2008 When a party to a case is represented by counsel, counsel and counsel alone should be filing the pleadings. In addition to this error, the motion alleged that Wachovia Bank, the trustee of a trust established under the will of Robert A. Geary. The question at issue was whether the trustee ought to be compelled to make a distribution. The court notes that the will is probated in the Circuit Court for the City of Chesapeake and that this is a matter of state law; therefore, the court declined to exercise jurisdiction over the matter.

Time For Filing Dischargeability Complaint


In re Nwoke; Case No. 07-10324-SSM; March 18th, 2008 This case was before the court on the motion of Tenacity Settlements, LLC (“Tenacity”) for leave to file a complaint to determine the dischargeability of Tenacity’s claim against the debtor to recover a payment made by mistake. Tenacity was not listed as a creditor and not given notice of the bankruptcy case. This complaint to determine dischargeability was filed after the date to file complaints to determine dischargeability. However, “a complaint to determine dischargeability of an unlisted debt under § 523 (a)(3), Bankruptcy Code, may be filed ‘at any time.’” FRBP 4007(b). However, a complaint to determine the dischargeability of a debt for embezzlement or larceny under §523(a)(4) is governed by §523(c) and must be filed no later than 60 days after the first date set for the meeting of creditors. FRBP 4007(c). Although the court is empowered to extend the…Read More

Relationship Between Fiduciary Duty In and Out of Bankruptcy and Non-Dischargeability


In re Stewart; Case No. 07-10860-RGM; March 7th, 2008 This case was before Judge Mayer on a motion for summary judgment filed by the debtor. The Plaintiff in this case filed an adversary proceeding asserting that a judgment it had obtained in District Court in Oregon was nondischargeable under §§523(a)(4) and (a)(6) of the Bankruptcy Code. Secton 523(a)(4) and its predecessors have long narrowly construed the scope of fiduciary relationships encompassed by them. There must be a technical or express trust which predates and exists apart from the act creating the liability. Agents, bailees, brokers, factors, partners and similarly situated persons are generally excluded. 4 Collier on Bankruptcy ¶523.10[1][d]. See KMK Factoring, LLC v. McKnew(In re McKnew), 270 B.R. 593, 624 (Bankr.E.D.Va. 2001). The court determined that the debtor’s duty in this case was akin to the fiduciary duty partners owe each other and does not fall within the parameters…Read More

Proceeding with Divorce When in Bankruptcy


In re Exum; Case No. 08-10079-RGM; February 21st, 2008 Debtor’s spouse filed a Motion for Relief from the Automatic Stay to Proceed with divorce proceedings. Court noted that the automatic stay, does not operate as a stay of the commencement or continuation of a civil action “(ii) for the establishment or modification of an order for domestic support or obligations” or “(iv) for the dissolution of a marriage, except to the extent that such proceeding seeks to determine the division of property of the estate.” Bankruptcy Code §362(b)(2)(A). The court does have a problem, however, with allowing the equitable distribution hearing to go forward. The court notes that because the Trustee and the creditors are not proper parties before the circuit court in the divorce proceeding and they may be adversely affected by any division of property. Ms Exum argued, that she will be adversely prejudiced because it is the…Read More

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