Harry is the disabled vet, who filed bankruptcy in 2015. He cleared his credit card debts and gave up his 2007 Cadi that was financed by Navy Fed.
Since then his health got worse, his income dropped and he got behind on his house payment. We filed a Chapter 13 payment plan, to give him time to catch up his house.
Up pops Navy Federal, demanding to be paid. Demanding to be paid on the car he gave up in his 2015 bankruptcy.
Navy Federal probably broke no rule, asking to be paid on a debt that had been cleared. According to the Supreme Court, there's no rule against what Navy Fed did here. Banks and debt collectors can file a bankruptcy Proof of Claim, even if their claim isn't enforceable. It doesn't have to be enforceable, it just has to be a claim.
The Supremes put the burden on Harry--and on me, Harry's lawyer--to catch them at it. This time, we did.
According the the Supreme Court, banks and debt collectors can ask to be paid in bankruptcy even if they know they don't have an enforceable debt. They don't need a valid claim, just a claim.
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