Bankruptcy Dollar Amounts Changed April 1

Bankruptcy Code sections that reference a dollar amount, such as the threshold for a presumption of abuse on the means test or the cap on Chapter 13 debts, were adjusted effective April 1, 2010. This change occurs every three years and is tied to the Consumer Price Index.

Here’s a table of the changes in amounts; new official bankruptcy forms reflecting the changes where they impact the schedules are published on the court’s web site.

If you are a California bankruptcy lawyer, note that the state exemption amounts were also adjusted on April 1. Links to the list of state law exemptions and the updated dollar amounts of those exemptions are found on my Bankruptcy Soapbox.

Sandra Gomes

Curious as to what happens when you client has too much debt for a Chapter 13 and does not qualify for a Chapter 7? Any advise?

Cathy Moran, Esq.

First, I’d check my work.

Does the means test apply? Any chance that the debt is primarily business and/or tax?

Have you projected the debtor’s living expenses going forward to included needed but postponed medical care or even something so basic as health insurance?

Any reason to think that income will fall over time?

Have you made adequate provision for the debtor’s income taxes going forward.

If you still find the B-22 isn’t in your favor, is there a special circumstances argument that you can make?

Keep working the problem. I have not seen this happen too often in the 4+ years we’ve been stuck with the means test.

Cathy