Dezenberg & Smith, Attorneys At Law - Bankruptcy

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From the desks of G. John Dezenberg, Jr. and Brandon N. Smith are some of the latest developments in Bankruptcy Law and Local Bankruptcy Practice……

G. John Dezenberg, Jr. Attorney At Law Becomes Dezenberg & Smith, P.C., Bankruptcy Attorneys

Effective July 1, 2017, G. John Dezenberg, Jr., Attorney At Law has become the Law Firm of Dezenberg & Smith, P.C., with Brandon N. Smith becoming a partner in the firm. We are looking forward to many years of providing the highest quality Bankruptcy Services to the citizens of North Alabama.

G. John Dezenberg, Jr. is a Featured Speaker at the 35th Annual Bankruptcy Law Update put on by the University of Alabama School of Law.

On November 18, 2016, Dezenberg & Smith, Attorneys At Law was a featured speaker on the topic of “Exemptions and Lien Avoidances” at the 35th Annual Bankruptcy Law Conference put on by the University School of Law at the Wynfrey Conference Center in Birmingham, Alabama. Other featured speakers on the topic were the Honorable Judge Henry A. Callaway, and eternal nemesis Jeffrey L. Cook taking the opposing viewpoint on applicable exemptions.

11th Circuit Joins the 4th Circuit and Departs from the 5th, 8th and 10th Circuits in Holding that a statement about a Single Asset is a statement “respecting the Debtor’s Financial Condition” For Purposes of Non-Dischargeability

In Appling v. Lamar, Archer & Cofrin, LLP (In re: Appling), 834 F.3d 953 (11th Cir. 2017) the 11th Circuit Court of Appeals held that the Debtor’s false statement about the amount of his tax refund was a statement “respecting the debtor’s financial condition” such that the Debt could be held non-dischargeable. The 11th Circuit in this case held that because the statement was not in writing it was insufficient under Section 523(a)(2) of the United States Bankruptcy Code to have the debt declared non-dischargeable.

11th Circuit Rules That They Do Not Have Jurisdiction to Consider a Bankruptcy Court’s Unauthorized Dismissal of a “Non-Core” Proceeding Where All Parties Had Not Consented to the Bankruptcy Court Entering A Final Order

In another Stern v. Marshall spin-off, the 11th Circuit in Wortley v. Bakst, 844 F.3d 1313 (11th Cir. 2017) held that they did not have jurisdiction to consider a Bankruptcy Court’s Dismissal of a Non-Core Proceeding because all of the parties to the action had not consented to the Bankruptcy Court entering a final order and the final order was thus a nullity since the Bankruptcy Court was required to submit its findings and conclusions to a Federal District Court for entry of a final order.

11th Circuit Holds That A Debt May Be Declared Non-Dischargeable Under Section 523(a) (19) (A) of the United States Bankruptcy Code For Violation of the Securities Laws Even Without Evidence of Debtor Misconduct

In Lunsford v. Process Techs. Services (In re: Lunsford), 848 F.3d 963 (11th Cir. 2017) the 11th Circuit Court of Appeals held that a debt resulting from violation of the Securities Laws may be excepted from Bankruptcy Discharge even without evidence of Debtor misconduct as the clear language of Section 523 (a) (19) (A) of the United States Bankruptcy Code does not require a showing of debtor misconduct.

11th Circuit Holds That Florida Department of Revenue Cannot Intercept Payment To Debtor To Apply To A Domestic Support Obligation After Confirmation of Debtor’s Plan

In Florida Dept. Of Revenue v. Gonzalez (In re: Gonzalez), 832 F.3d 1251 (11th Cir. 2016) the 11th Circuit Court of Appeals held the Florida Department of Revenue in violation of the Automatic Stay for intercepting a payment to the Debtor for a Domestic Support Obligation scheduled to be paid in full under Debtor’s confirmed Chapter 13 Plan pursuant to Section 362(b)(2)(C) of the United States Bankruptcy Code.

11th Circuit Court of Appeals Allows Contempt Sanctions Against President Of Corporation For Corporation In a Chapter 7 Bankruptcy

In Gowdy v. Mitchell, (In re Ocean Warrior, Inc.), 835 F.3d 1310 (11th Cir. 2016), the 11th Circuit Court of Appeals upheld contempt sanctions issued against the President of a Bankrupt Corporation in the Corporation’s Chapter 7 Case saying the Bankruptcy Court had subject matter jurisdiction over the issue and that Section 105 (a) of the Bankruptcy Code authorizes the Bankruptcy Court to issue such sanctions.

11th Circuit Forces Debtors Who Surrendered Property in Bankruptcy to Fulfill Their Duty in Not Opposing Foreclosure in State Court Action

In Failla v. Citibank, N.A. (In re: Failla), 838 F.3d 1170 (11th Cir. 2016), the 11th Circuit Court of Appeals ruled that Debtors who filed Chapter 7 and indicated their intention to surrender real property were not later allowed to oppose a foreclosure proceeding in a State Court proceeding under Section 521(a)(2) of the U.S. Bankruptcy Code.

11th Circuit Allows Cases for Fair Debt Collection Practices Act Violations For Creditors Filing Proofs of Claim in Bankruptcy for Debts Outside the Statute Of Limitations

In Johnson v. Midland Funding, LLC, 823 F.3d 1334 (11th Cir. 2016) the 11th Circuit held that Creditors filing Proofs of Claim on Debts that are outside of the Statute of Limitations may be sued for violating the Fair Debt Collections Practices Act. The U.S. Supreme Court granted Certiorari to review this decision on October 11, 2016.

11th Circuit Holds That Bankruptcy Case tried before Federal District Court is subject to the Federal Rules of Bankruptcy Procedure and not the Federal Rules of Civil Procedure

In Rosenberg v. DVI Receivables XIV, LLC, 818 F.3d 1283 (11th Cir. 2016) the 11th Circuit Court of Appeals held that the Federal Rules of Bankruptcy Procedure and not the Federal Rules of Civil Procedure are controlling in a Bankruptcy Case tried before a non-Bankruptcy Court (here a Federal District Court).

G. John Dezenberg, Jr. and Brandon N. Smith Attend 24th Annual NACBA Bankruptcy Convention in San Francisco, CA.
From May 19-22, 2016, G. John Dezenberg, Jr. attended his 12th Consecutive NACBA Annual Convention and Brandon N. Smith attended his 1st in beautiful San Francisco, CA. When our attorneys were not busy learning the latest developments in Bankruptcy Law from the leading experts across the country, they were busy finding the best and best-priced cuisine in the Bay Area. Based on their personal survey, Dezenberg & Smith highly recommends: House of Nanking (Chinese), Sam’s Grill & Seafood Restaurant (Seafood), Akiko’s (Sushi), and Sushiritto (Fast Food). They were also able to catch their beloved Chicago Cubs put an 8-1 whupping on the San Francisco Giants at AT&T Park Friday night, May 20th. Feel free to ask Dezenberg & Smith, Attorneys At Law to tell his “Waving Cat Statue” story from this trip.

G. John Dezenberg, Jr. and Brandon N. Smith Speak At 1st Annual Mike Ford, Trustee Free CLE Conference in Decatur, AL, on June 13, 2016
G. John Dezenberg, Jr. and Branson N. Smith were featured speakers at the 1st Annual Free CLE Conference hosted by Mike Ford, Chapter 13 Trustee on June 13, 2016. They spoke on the topic of application of Alabama’s New Homestead and Personal Property Exemptions to Bankruptcy Cases and why the Southern District of Alabama Bankruptcy Court got it wrong in In Re Middleton, 544 B.R. 449 (Bktcy. S.D. Ala. 2016). Jeff Cook of Grisham & Cook spoke on the opposite view. Our seminar materials are available on this website.

G. John Dezenberg, Jr. Named One Of Alabama’s “Ten Best” Bankruptcy Attorneys For Client Satisfaction By The American Institute Of Bankruptcy Attorneys.
G. John Dezenberg, Jr. has been named one of Alabama’s “Ten Best” Attorneys for Client Satisfaction by the American Institute of Bankruptcy Attorneys (AIOBA). Dezenberg & Smith is pleased that the governing body of the AIOBA has recognized Mr. Dezenberg for this award which rewards those attorneys who put their client’s satisfaction above all else.

G. John Dezenberg, Jr., named One of Alabama’s Top Ten Bankruptcy Attorneys For Alabama by the National Academy For Bankruptcy Attorneys
The National Association Of Consumer Bankruptcy Attorneys (NAFBA) has named G. John Dezenberg, Jr., as one of Alabama’s “Top Ten Bankruptcy Attorneys. This award is based on peer nominations and a selection committee from this Washington, D.C. based group.

The National Advocates: Top 100 Lawyers names G. John Dezenberg, Jr., One Of Alabama’s Top 100 Lawyers for 2015
The National Advocates has named G. John Dezenberg, Jr., one of Alabama’s Top 100 Lawyers for 2015. Dezenberg & Smith are pleased that Mr. Dezenberg has been recognized for this honor which is presented to attorneys in all categories of law, not just Bankruptcy lawyers.

G. John Dezenberg, Jr., Awarded Perfect 10.0 Rating on AVVO
AVVO Legal Ratings ( has awarded G. John Dezenberg, Jr., a perfect 10.0 rating (“Superb”). This rating is based on peer reviews from other attorneys and client reviews. Dezenberg & Smith are pleased that clients and peers have acknowledged Mr. Dezenberg’s commitment to excellence in the field of Bankruptcy Law for the past 29 years.

U.S. Supreme Court holds that Puerto Rico Cannot Pass Its Own Debt Enforcement And Recovery Act That Would Override U.S. Bankruptcy Code Provisions
In Puerto Rico v. Franklin California Tax-Free Trust, 136 S.Ct. 582 (2015), the U.S. Supreme Court ruled that the Commonwealth of Puerto Rico could not pass a law entitled Puerto Rico Public Corporation Debt Enforcement and Recovery Act that would override provisions of the Federal U.S. Bankruptcy Code. This decision is a separation of powers case and the U.S. Supreme Court treats the Commonwealth of Puerto Rico just like a State for purposes of determining whether the Commonwealth can pass a law to override Federal Law. The U.S. Supreme Court has responded here with a resounding “NO”.

U.S. Supreme Court Holds That A Debt Can Be Held Non-Dischargeable For “Actual Fraud” Even When Scheme Does Not Involve False Representation.
In Husky Int’l Electronics, Inc., v. Ritz, 136 S.Ct. 1001 (2016) the United States Supreme Court ruled that a debt owed by the Debtor could be held non-dischargeable even where there was not a false representation made by the Debtor to the Creditor. In Husky Daniel Lee Ritz, Jr. controlled several corporations including Chrysalis Manufacturing Corp.. Chrysalis ran up a bill with Husky International of nearly $164,000.00. Before Husky could collect, Ritz drained the Chrysalis of all of its assets and money by transferring them to other corporations he controlled. The U.S. Supreme Court held that “actual fraud” was sufficient here to hold the debt non-dischargeable even though Ritz had not made any false representations to Husky International.

U.S. Supreme Court Holds That Bankruptcy Professionals Cannot Recover Fees Incurred To Recover Fees
The United States Supreme Court held in Baker Botts, LLP v. ASARCO, LLC, 135 S.Ct. 2158, 192 L.Ed.2d 208 (2015) that Section 330 (a) (1) of the United States Bankruptcy Code does not authorize an award of attorneys fees for work performed in defending a fee application for attorneys fees incurred on a Bankruptcy Case

U.S. Supreme Court reversed 11th Circuit Opinion that allowed Mortgage Strip-Offs in Chapter 7 Cases
In Bank Of America, N.A. v. Caulkett, 135 S.Ct. 1995, 192 L.Ed.2d 52 (2015) the U.S. Supreme Court reversed the 11th Circuit Court of Appeals that had allowed strip-offs of second or worse (third, etc.) mortgages that were wholly unsupported by any equity in real property in Chapter 7 Cases. Strip-offs are still allowed in Chapter 13 Cases where there is no equity to support the second or worse mortgage.

U.S. Supreme Court Holds That Debtors Are Entitled To A Return Of All Non-Distributed Funds Immediately Upon Conversion From Chapter 13 To Chapter 7
The United States Supreme Court held in Harris v. Viegelahn, 135 S.Ct. 1829, 191 L.Ed.2d 783 (2105) that United States Chapter 13 Trustees are not authorized to distribute funds being held by them, nor funds received by them, once the Debtor files a Notice Of Conversion from Chapter 13 to Chapter 7. The previous practice had been that the Chapter 13 Trustee would distribute held funds to creditors upon receiving a Notice of Conversion. The Chapter 13 Trustee now must issue a refund of all funds held and all funds received after a Notice of Conversion is filed to the Debtor.

U.S. Supreme Court Allows U.S. Bankruptcy Court Judges to Adjudicate Stern Claims With The Knowing And Voluntary Consent Of The Parties
Stern v. Marshall (the infamous Anna Nicole Smith case) is a U.S. Supreme Court ruling that held that Article III of the United States Constitution forbids Bankruptcy Judges from entering final judgments on claims that only “augment” the bankruptcy estate and would otherwise “exist without regard to any bankruptcy proceeding”. The U.S. Supreme Court held in Wellness International Network, Ltd. v. Sharif, 135 S.Ct.1932, 191 L.Ed.2d 911 (2015) that a U.S. Bankruptcy Judge can enter a final judgment on a “Stern” claim with the knowing and voluntary consent of the parties to the litigation and that the consent does not have to be “express consent” but may be consent by actions whether than words.

U.S. Supreme Court Rules That An Order Denying Confirmation Is Not A Final Order From Which A Debtor May Appeal If The Debtor Remains Free To Propose Another Plan
The U.S. Supreme Court in Bullard v. Blue Hills Bank, 135 S.Ct. 1686, 191 L.Ed.2d 621 (2015) held that a U.S. Bankruptcy Court’s Order Denying Confirmation is not an appealable Order so long as the Debtor remains free to propose another plan. This ruling states that an order denying confirmation with leave to amend maintains the status quo of the Debtor and Creditors until a plan can be confirmed or the case is dismissed.

11th Circuit Rules That “Parts-Swapping” on Airplanes Does Not Negate Ownership In Individual Planes
In Avantair, Inc. v. Beth Ann Scharrer, 15-10303, the 11th Circuit was called upon to decide whether “parts-swapping” on a fleet of airplanes destroyed client’s ownership interests in individual planes. Avantair was a company that maintained planes and made them available to their owners for travel. When money got tight, Avantair found itself in the position of having to cannibalize parts from one plane to install them on another in order to keep at least some of its fleet operational. Avantair argued that this “parts-swapping” negated the customer’s ownership in a particular plane and that all of the customers now had an interest in all of the planes. The 11th Circuit rejected this argument and ruled that even with the parts-swapping between planes, the customers still maintained their ownership interest in their particular plane.

11th Circuit Holds That Fair Debt Collection Practices Act Cases Against Creditors For Filing Stale Claims Are Not Precluded Under The Bankruptcy Code.
The 11th Circuit was earlier called upon to determine whether a Creditor filing a Stale Claim in a Chapter 13 Case could be in violation of the Fair Debt Collections Practices Act in Crawford v. LVNV Funding, 758 F.3d 154 (11th Cir. 2014). They answered in the affirmative in Crawford. In Aleida Johnson v. Midland Funding, LLC, 15-11240 (11th Cir. 2016) the 11th Circuit was called upon to determine whether the Bankruptcy Code overrides the Fair Debt Collection Practices Act when it comes to filing stale claims. The 11th Circuit held that the Bankruptcy Code does not preclude the filing of a Fair Debt Collection Practices Act Claim and that the two statutes can co-exist. Just because the Bankruptcy Code allows claims to be filed doesn’t mean there cannot be consequences to a creditor for filing a stale (past the statute of limitations) claim.

11th Circuit Rules That Debt Purchasers Filing Stale Claims In Chapter 13 Cases Violates The Fair Debt Collection Practices Act
The 11th Circuit Court of Appeals in Crawford v. LVNV Funding, 13-12389 (July 10, 2014), has ruled that Debt Purchasers filing Proofs of Claim in Chapter 13 Cases on Debt that cannot be sued upon under the Statute of Limitations (“stale debt”) is a violation of the Fair Debt Collection Practices Act. This is a monumental decision by the Court that should deter the practice of debt purchasers filing stale debt claims in Chapter 13 Cases.

11th Circuit Court Of Appeals Rules That Damages Recovered In A Stay Violation Case Brought By The Debtor Are Property Of The Bankruptcy Estate In A Chapter 13
The 11th Circuit Court of Appeals has ruled in Crouser v. BAC Home Loans Servicing, L.P., 567 F.Appx 902 (11th Cir. 2014) that damages recovered by a Debtor in a Chapter 13 Bankruptcy Case for a violation of the Automatic Stay by a Creditor are property of the Bankruptcy Estate and must be paid to the Trustee for distribution to creditors. This case continues the broad definition of property of the estate by the Courts to include causes of action that the debtor acquires after commencement of the plan.

11th Circuit Court Of Appeals Rules That Vehicles Must Be Valued At “Replacement Value” In Chapter 13 Whether Debtor Keeps Or Surrenders The Vehicle
The 11th Circuit Court of Appeals ruled in Santander Consumer U.S.A., Inc. v. Brown 746 F.3d 1235 (11th Cir. 2014) that a vehicle must be valued at “replacement value” whether the vehicle was surrendered or retained in a Chapter 13 case if purchased outside of 910 days from the filing of the Bankruptcy Case. The Court had previously ruled that a vehicle purchased within 910 days from the date of the filing of the Bankruptcy Petition could be surrendered for the debt owed, as its value under the Bankruptcy Code would be equal to the amount owed whether the vehicle was retained or surrendered.

11th Circuit Court Of Appeals Rules That Emotional Distress Damages Are Recoverable In Actions Brought For Violation Of The Automatic Stay
The 11th Circuit Court Of Appeals ruled in Lodge v. Kondaur Capital Corp., 750 F.3d 1263 (11th Cir. 2014) that emotional distress damages fall within the broad category of actual damages and are recoverable by a Debtor in an action brought for violation of the Automatic Stay (preventing creditors from attempting to collect on their debt after the filing of a Bankruptcy Petition).

U.S. Bankruptcy Court For Southern District Issues Ruling on Application of New Alabama Exemptions to Bankruptcy Cases.
The U.S. Bankruptcy Court for the Southern District of Alabama issued a Ruling on Application of the New Alabama Exemption Statute to Bankruptcy Cases in In re Middleton, 544 B.R. 449 (Bktcy. S.D. Ala. 2016). Effective June 11, 2015, Alabama increased the homestead exemption for Alabama residents from $5000.00 per person to $15,000.00 per person and personal property exemptions from $3,000.00 per person to $7,500.00 per person. The Court in In re Middleton held that the new exemptions apply to Bankruptcy Cases filed in which there is at least one debt incurred after June 11, 2015 by the Debtor or Debtors. Our attorneys believe this decision is wrong and that the new exemptions should be applied to all cases filed after June 11, 2015. Dezenberg & Smith, Attorneys At Law, speaking at the 1st Annual Free CLE Seminar in Decatur, AL only half-jokingly commented that Bankruptcy Attorneys in Alabama should all get credit card machines and allow clients to pay at least some of their fees via credit card to insure that they are allowed to make use of the new exemptions.

New Bankruptcy Forms Become Effective December 1, 2015
The Advisory Committee on Bankruptcy Rules and the United States Bankruptcy Court has announced that new Bankruptcy Forms will go into effect on December 1, 2015. Dezenberg & Smith are ready to utilize the new forms upon their implementation date.


“Mr. Dezenberg is very professional and friendly. My husband and I didn’t feel rushed. He explained the process in detail, and he made us feel really comfortable.” – Leticia

“Mr. Dezenberg was the nicest and most helpful lawyer I’ve ever met.” – Melissa

“several other attorneys that I asked, who don’t practice this type of law, recommended him.” – AJ

“John has represented me on more than 1 occasion and with excellent results.” – Donna W.

“Not only is he very competent, but he is always responsive and he really cares about his clients.” – Phil G.

“John is one of the best bankruptcy attorneys in North Alabama.” – Eric Artrip

“I never felt rushed at my appointments. I would highly recommend him to anyone who needs a bankruptcy attorney.” – Lisa

“His vast experience of the law makes him a powerful advocate for his clients.” – Thomas Jarvinen

“He was very open and honest and to the point. I would recommend him any day of the week.” – Tina

“He was very professional, not once did he talk down to me nor made me feel bad about myself.” – Gloria L.

“Brandon gave me the legal advice I needed. He is very knowledgeable and answered every question I asked him.” – Celeste

“I would recommend Brandon Smith to anyone that needed a great Bankruptcy Lawyer.” – John W.

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