Articles Posted in Bankruptcy

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Debtor filed for Chapter 7 bankruptcy protection and listed an insurance policy with Northwestern Mutual as an asset on his bankruptcy schedules. Debtor claimed the policy’s entire cash surrender value as exempt property because his son (Son) was the beneficiary. The bankruptcy Trustee objected because Son was an adult and not “dependent upon” Debtor within the meaning of Ind. Code 27-1-12-14(e). That statute exempts life insurance policies from debtors’ bankruptcy estates when the named beneficiary is the “spouse, children, or any relative dependent upon” the debtor. Because bankruptcy courts in the Northern and Southern Districts of Indiana had issued conflicting opinions about the proper interpretation of the statute, the Bankruptcy Court for the Northern District of Indiana certified to the Supreme Court the question of whether, under section 27-1-12-14(e), the phrase “dependent upon such person” modifies only “any relative” or modifies “spouse,” “children,” and “any relative.” The Court concluded that the phrase “dependent upon such person” does not modify “spouse” or “children,” but only “any relative” named as beneficiary of a life-insurance policy. View "In re Howell" on Justia Law

Posted in: Bankruptcy

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Loan borrowers entered into a residential mortgage loan. After a dispute about whether the borrowers paid the proper amount of property taxes, the mortgage holder filed a foreclosure action, alleging that the borrowers failed to pay monthly mortgage payments and fees. The borrowers asserted numerous legal defenses and claims against the mortgage holder and loan servicer. The borrowers asked for a jury trial on these defenses and claims, but the trial court denied the request, reasoning that foreclosure was an "essentially equitable" cause of action. The court of appeals reversed, concluding that the essential features of this case were not equitable. The Supreme Court affirmed the trial court's denial of the borrowers' request for a jury trial, holding that the borrowers' claims and defenses shall be tried in equity because the core legal questions presented by the borrowers' defenses and claims were significantly intertwined with the subject matter of the foreclosure action. View "Lucas v. U.S. Bank, N.A." on Justia Law