Maryland Bankruptcy Blog » Recent Decisions

Whatever Happened to Usury Laws?

Brett Weiss, Esq. — Wed, 28 May 2008 01:34:53 +0000

Usury is defined in Webster’s as, “the lending or practice of lending money at an exorbitant interest.” All states, including Maryland, have laws prohibiting usury—in Maryland, the default rate of interest is 6%, and most loans cannot exceed 24%. So how is it that many credit cards have annual rates of 30% or more? How is it that payday loans and tax refund loans have interest rates over 300%?

The answer lies in the federal National Bank Act and a series of Supreme Court decisions.

The National Bank Act, first adopted in 1863, provides for the establishment and regulation of national banks. For more than 100 years, that law was interpreted to require that even national banks can only charge interest at the rate allowed by the state in which its customer is located. In 1978, the Supreme Court changed everything. (more…)

Does the “Absolute Priority Rule” Still Apply in Individual Chapter 11 Cases?

Brett Weiss, Esq. — Sun, 11 Nov 2007 12:51:19 +0000

The Absolute Priority Rule (APR) is a long-established principle that in Chapter 11 cases creditors’ claims take priority over shareholders’ claims. Pre-BAPCPA, cases such as In re Gosman, 282 B.R. 45 (Bankr. S.D. Fla. 2002) held that the retention of even exempt property by an individual debtor in a Chapter 11 Plan violates the absolute priority rule unless unsecured creditors are paid in full. Given the many changes made to Chapter 11 by BAPCPA, does the APR still apply? Two recent cases hold that it does not.

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New Decision On Bankruptcy for People Living Outside the United States

Brett Weiss, Esq. — Tue, 02 Oct 2007 00:21:00 +0000

The Honorable Nancy V. Alquist, a Judge on the United States Bankruptcy Court for the District of Maryland, entered a ruling on September 28, 2007 in an important case I argued, In re Baker. This case deals with international bankruptcy at the individual level—it lets people living outside the United States file for bankruptcy in the United States to discharge their U.S. debt. A copy of her opinion may be found by clicking on this link.

The debtor in this case is a U.S. citizen, and moved overseas several years ago. At the time he moved, he owed balances to a number of U.S. credit cards. It used to be that if you incurred a debt in the United States and then moved to foreign country, it didn’t make sense for the creditor to look for you.

Things have changed.

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Brett Weiss to Lecture and co-Chair Advanced Consumer Bankruptcy Institute

Brett Weiss, Esq. — Mon, 01 Oct 2007 22:53:40 +0000

On November 29, 2007, Brett Weiss will lecture and co-Chair the MICPEL Advanced Consumer Bankruptcy Institute, a full-day session to be held in Columbia, Maryland.

Mr. Weiss will appear on two panels, Chapter 11 for Individuals (with the Honorable Thomas J. Catliota, , Assistant U.S. trustee Mark A. Neal, Stanton J. Levinson, Esquire and James A. Vidmar, Jr.) and Tales from the Listserv and Blogs: FAQ’s and Baffling Issues (with Marc R. Kivitz, Carolyn Gilden Krohn and Daniel M. Press). He will also be giving a lecture on Securitization, and its impact on bankruptcy cases.

This is the second year Mr. Weiss has co-chaired and lectured at this important Institute.

Brett Weiss is Quoted in bankrate.com Article on Bankruptcy Tithing Decision

Brett Weiss, Esq. — Sun, 09 Sep 2007 16:59:19 +0000

Brett Weiss is quoted in the article, “Bankruptcy Law Forbids Tithing, Charitable Donations” on the business site www.bankrate.com. This article discussed New York Bankruptcy Judge Robert Littlefield, Jr.’s August 28, 2006 opinion in In re Diagostino finding that tithes were not allowable deductions on the Means Test. Weiss said that, “The ruling puts consumers in a horrible dilemma. People file because overwhelming majorities have had horrible things happen to them, and now we have to say, ‘Well, you might not be able to fix things if you continue to tithe.’”

Read the NACBA press release on the Diagostino decision.