Sometimes Good Things CAN Happen in Bankruptcy for Student Loan Debts

By: Donald L Swanson Every now and then a good thing happens in bankruptcy. It’s not very often—but good things do happen. Here’s a story of one of those good things [Fn. 1]. Our Hero (the bankruptcy Debtor) is a 54 year old, single mother of two college-aged children. She is a self-employed professional in a... Continue Reading →

Eighth Circuit’s In re Knudsen Opinion is Still Good Law on Chapter 12 Taxes — Despite the U.S. Supreme Court

By: Donald L. Swanson In 1986, Congress enacted Chapter 12 of the Bankruptcy Code to help farmers. Throughout the 1980s, many farmers liquidated their farm assets, either voluntarily or involuntarily, and moved on to other careers. Unfortunately, the liquidation left many of them with nondischargeable tax liabilities beyond anything they could ever repay. Congressional Action on... Continue Reading →

How, Decades Ago, the U.S. Supreme Court Screwed-Up Our Bankruptcy World — Twice

By: Donald L. Swanson Here are two declarations of law, by the U.S. Supreme Court and from decades ago, that screwed-up our bankruptcy world — all the way to present: “The bankruptcy power, like the other great substantive powers of Congress, is subject to the Fifth Amendment.” Louisville Joint Stock Land Bank v. Radford, 295 U.S.... Continue Reading →

An Ancient Bankruptcy Law in China

By: Donald L. Swanson Centuries ago (during the 1200’s) the Mongols ruled China. Mongol law in China "provided for declarations of bankruptcy.”  Here are some details: —“no merchant or customer could declare bankruptcy more than twice as a way to avoid paying debts”; and —“On the third time he faced the possible punishment of execution.” [Fn.... Continue Reading →

Special Settlement Problems When Defendant Claims Poverty or Non-Collectibility

By: Donald L. Swanson “I’d be happy to pay the million dollars I owe you. The problem is that I have only two of them.” --A defendant’s claim of poverty and non-collectibility in settlement negotiations. A defendant's poverty/non-collectibility claim creates an interesting dynamic in mediation and other negotiations. And that’s true whether the defendant is an... Continue Reading →

Appeals to Bankruptcy Appellate Panels and “Sandbagging”

By: Donald L. Swanson One of the best innovations in the U.S. bankruptcy system is creation of bankruptcy appellate panels (“BAPs”), as a division of the U.S. circuit courts of appeals.  BAPs hear appeals of bankruptcy court decisions. Currently, there are five BAPs, one in each of the following circuits: First, Sixth, Eighth, Ninth and... Continue Reading →

Effects of Executory Contract Rejection — At U.S. Supreme Court

By: Donald L. Swanson Here’s a case about the effects of executory contract rejection. While its focus is on “intellectual property” rights under § 365(n) [Fn. 1], the case also delves into the effects of rejection for all types of executory contracts under § 365(g) [Fn. 2]. And this case demonstrates the hazards of a failure... Continue Reading →

Successor Liability After Bankruptcy Sales: Actual Knowledge v. Constructive Notice, at U.S. Supreme Court

By: Donald L. Swanson Imagine buying assets out of bankruptcy at a fair price, only to have a previously-unknown liability tag along. --Surprise, surprise! The U.S. Supreme Court has an opportunity to weigh-in on such a “Surprise, surprise” issue.  A petition for writ of certiorari is pending in a case where this could happen—complete with a $63... Continue Reading →

Business Owners Shifting Risks of Failure to Trade Creditors: Solutions are Needed

By Donald L. Swanson “Lending to the most highly indebted companies in the U.S. and Europe is surging.”— Wall Street Journal [Fn. 1] When a large business files for bankruptcy, there is one group that almost always suffers. It is a group with little-to-no power. It is the unsecured trade creditors. It is those that supply... Continue Reading →

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