Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Ninth Circuit: Debt In Asset Case Is Nondischargeable If Debtor Fails to Properly Schedule the Debt

By Lawrence J. Kotler and Geoffrey A. Heaton
July 01, 2024

In a recent published decision, the U.S. Court of Appeals for the Ninth Circuit addressed a previously unresolved question in that circuit: whether a debtor's failure to properly schedule a debt in an "asset case" renders the debt nondischargeable. Answering the question in the affirmative, the court held that, with the exception of a "no asset" bankruptcy case, a debt is nondischargeable in its entirety if the debtor fails to properly schedule the debt. See, In re Licup, 95 F.4th 1234 (9th Cir. 2024).

Background

In this case, creditor Jefferson Avenue Temecula LLC filed an unlawful detainer action against Christine Tracy Castro in 2012. In January 2013, Jefferson obtained a default judgment against Castro that included a monetary award to Jefferson in the amount of $31,780.29.

In February 2014, Castro and her husband, Edwin C. Licup, filed a voluntary Chapter 7 petition. Although Castro and Licup submitted the required schedule, or list, of their creditors' names and mailing addresses (also known as a creditor matrix), the document listed an incorrect address for Jefferson's counsel. Although there were assets for the trustee to distribute in the case, Jefferson never filed a proof of claim. It was undisputed that Jefferson failed to receive notice of the bankruptcy filing, and otherwise did not have knowledge of it in time to timely file a claim. The debtors later received a discharge that listed the debt owed to Jefferson as discharged. The bankruptcy case was closed in September 2016.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.

The Stranger to the Deed Rule Image

In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.