An unliquidated tort cause of action is just as much a “claim” for bankruptcy purposes as a credit card bill. Not all creditors send monthly bills I reminded my rookie lawyer friend. My friend’s fact pattern was a bit more complex than the unresolved auto accident: an exspouse was complaining that a title company mix-up [...]
Tag Archive: filing bankruptcy
An Bankruptcy Exemption Planning Basic
The most elemental exemption planning tool is to save exempt assets while consuming non exempt assets. It doesn’t require last minute transfers or fundamental alterations in the way assets are held. It simply requires attention to which pocket the debtor pays bills from. Clients who receive Social Security, disability, or other forms of income that [...]
Client Horror Story Contains An Asset Of The Bankruptcy Estate
Do you recognize your client’s tale of woe with prior professionals or not-so-professionals as signs of an incipient asset? A new bankruptcy lawyer was telling me about his client’s dealings with a loan modification lawyer he called a fraudster. That relationship resulted in a near foreclosure on the client’s home while the prior lawyer was [...]
Bankruptcy Checklist: Social Security Numbers
Do you check the client’s proffered Social Security number against the number on their tax return? I’d never thought to do so til my partner returned from a 341 meeting with this story. She was sitting waiting for our client’s turn at a first meeting of creditors when the trustee asked a debtor about [...]
Bankruptcy Abuse & Schedule J
The debtor passed the means test but lost a motion to dismiss for abuse of the bankruptcy system. Schedule J, the debtor’s projected future expenses, showed a monthly excess of $500. Dollars to doughnuts, the debtor’s bankruptcy lawyer followed the form and the budget provided by the client. Dismissal resulted. What happened here? Two [...]
Bankruptcy Schedules Call For Payoff Balance
Bankruptcy debtors hear something different when their lawyer asks, “What do you owe on your mortgage”. It’s as though they speak a different language, Client, while we speak Bankruptcy. As bankruptcy lawyers, we need to be bilingual. It shouldn’t be a trick question, but all too often the answer a bankruptcy lawyer gets back is [...]
Bankruptcy Exemptions: 10 Ways to Deal with Excess Cash
Bankruptcy lawyers occasionally are confronted with the client with more cash, or other marketable assets, worth more than the available exemptions to protect them. Here are some things to spend that currently non exempt cash on that are exempt, or unappealing to a bankruptcy trustee: Fund IRA’s Obtain cash value life insurance up to exemption [...]
Discharging Taxes in Bankruptcy: This Year’s Trap
Income taxes are dischargeable in bankruptcy if they meet the three year rule; the two year rule; and the 240 day rule. When you count back for the three year rule (the date on which the return was last due without penalty is more than three years prior to the date the bankruptcy is filed), [...]
Do Your Bankruptcy Schedules Tell the Client’s Story?
The last check before you file your client’s bankruptcy schedules should be a step back to see if the schedules “tell the story”. The background and the color don’t make it to schedules and SOFA, but you need to read them from the trustee’s point of view to see if they make sense and reflect [...]