CreditSlips

11th Circuit: Student Borrower Consumer Claims not Preempted by HEA

04/14/20

An 11th Circuit panel ruled last week that student loan borrowers may assert state law misrepresentation claims against a student loan servicer that falsely told them their FFEL loans qualified for Public Service Loan Forgiveness.

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What to do When Your Contract is a Dog's Breakfast

04/13/20

Tomorrow is the first of the two days when the students in my international debt class (with Steve Choi and Lee Buchheit) present their final papers to a group of outside experts.  The students have come up with some intriguing ideas for the restructurings of Lebanese and Argentine debt, a couple of which I flag below.

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Corona Cash and Refund Anticipation Checks

04/12/20

Vijay Raghavan, who will be joining the Brooklyn Law School faculty this summer and his colleague Tom James, shared a troubling observation about the payment of the recovery rebates ("Corona Cash" or "Mnuchin Mnoney") through direct deposit to taxpayers.

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The Myth of Optimal Expectation Damages

04/10/20

Roughly eighty years ago, Lon Fuller and William Perdue (the former, then a faculty member at Duke Law, and the latter, a 3L), wrote two of the most famous articles in contract law (here). One of the puzzles they posed -- about why the law favors the expectation damages measure -- resulted in an entire body of scholarship, including the theory of efficient breach.

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CARES Act "Rebates" and Bankruptcy

04/08/20

Related to Pamela's last post and our article regarding garnishments and the CARES Act "rebates," the US Trustee issued a notice to Chapter 7 and Chapter 13 trustees giving them guidance on what to do about them in a bankruptcy case.

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Treasury Must Act Now To Protect Relief Payments From Debt Collectors

04/08/20

The CARES Act provides for direct "rebate" payments to American households. Treasury is gearing up to send some of those payments out soon. But Congress forgot to protect the payments from garnishment.

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Lebanon’s Unusual Pari Passu Clause and the Question of How to Construct Credible Priority

04/07/20

A few weeks ago, Mark Weidemaier and I blogged about Lebanon’s unusual pari passu clause and Collective Action Clauses.

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CARES Act mortgage foreclosure and tenant eviction relief

04/01/20

The final text of the act is now available here. The foreclosure relief is in Section 4022 and the eviction moratorium is in Section 4024. Mortgage borrowers with federally related loans (FHA, VA, Farmer's Home, Fannie or Freddie) may request 6 months of forbearance, i.e.

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CARES ACT student loan relief

03/31/20

The CARES Act signed into law last week suspends payments and eliminates interest accrual for all federally-held student loans for six months, through September 30. These measures exclude private loans, privately-held FFEL loans and Perkins loans. The other five subsections of section 3513 mandate important additional relief. Under subsection (c) the six suspended payments (April to September) are treated as paid for purposes of “any loan forgiveness program or loan rehabilitation program” under HEA title IV.

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How to Treat Post-Petition Attorneys' Fees

03/29/20

This is a hyper-technical bankruptcy question that's been bothering me for a while: what happens with post-petition attorneys' fees for undersecured/unsecured creditors after the Supreme Court's 2007 decision in Travellers v. PG&E? Specifically, assuming that the post-petition attorneys' fees fees are allowed as an unsecured claim, are they credited against a collateral cushion before or after post-petition interest?  

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