What New Bankruptcy Lawyers Need To Know: Beyond The Code

My Client Communication Strategy: Flood the Zone

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Poor client communication is the source of both client anguish and discontent with the legal profession. Case in point: failure to return calls is the most frequent complaint to the state bar where I practice. As bankruptcy lawyers, we're dealing with people under stress: they are seldom at their best and their capacity to absorb the intricacies of bankruptcy is often limited. Still we need their involvement to do a bankruptcy case well. When they don't see the big picture or walk out of the office with unanswered questions and half-baked understandings of their case, discontent or major blunders often follow. In the day of ubiquitous on-line review sites and the ever present DIY ethos on the internet, neither the individual practitioner nor the bankruptcy bar as a whole can withstand the negatives that follow from the unhappiness that results. I have a low-tech strategy for both addressing the information gap up front and lessening the need for one-on-one explanations of … [Continue reading...]

What I Learned About Bankruptcy on Facebook

By Cathy Moran, Esq. Filed Under: Opinionated

For nearly a year, I’ve been hanging out on a Facebook “bankruptcy support” group. It’s a world full of misunderstanding, fear, and anguish. But it’s also clear to me that our profession can learn some things from that stew, both individually and collectively. Represented, sorta The thing that glares at me is the number of posters who are represented by attorneys, yethave little or no … [Continue reading...]

Still Crazy After All These Years

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

More than four decades after the Bankruptcy Code was enacted, we are still tripping over the lingering conundrums of Chapter 13. Four decades, and appeals courts haven't brought clarity and predictability to what should be a simple, well understood process for individuals to reorganize their financial lives. I speak of course about the mysteries of property of the estate, vesting, and plan … [Continue reading...]

Voluntary Retirement Contributions Not Disposable Income in the 9th

By Cathy Moran, Esq. Filed Under: Chapter 13

Contributions to an employer-sponsored retirement plan going forward are excluded from disposable income in Chapter 13, says the 9th Circuit in Sadana, 19 years after BAPCPA became law. What took so long? Words in the statute matter Congress, in its BAPCPA-typical awkward fashion, said right there, in 541(b)(7)'s hanging paragraph, that amounts withheld for voluntary contributions to a … [Continue reading...]

How to Wring Out Every Last Means Test Deduction

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Every extra dollar deduction you can wring out on bankruptcy's means test is important. A dollar doesn't sound like a lot, but an extra dollar less in DMI saves a Chapter 13 debtor $60 over the life of a 60 month plan. Every $100 saves $6000. You get the picture. Besides lowering the cost of the case to the debtor, a lower bottom line brings the DMI calculation into better alignment with … [Continue reading...]

Don’t Dismiss FRBP 7041

By Cathy Moran, Esq. Filed Under: lawyer skills

Quick: tell me all you know about FRBP 7041. Hint: it involves voluntary dismissals Maybe you're like me and never gave it much thought. My encounter with the rule ended up at the 9th Circuit, so I now know a lot more about how it impacts bankruptcy motion practice. I concluded that the "Withdraw" event on ECF enabled a trap for the unwary counsel and court. Here's the rule FRBP 7041 … [Continue reading...]

Navigate The Marital Debt Thicket In Bankruptcy

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Family Law in Bankruptcy

Love and Marriage. Fries and Catsup. Chips and Dip. Like these famous pairings, divorce and bankruptcy are frequent companions. When a couple goes their separate ways, often the most substantial marital accumulation is debt. The questions we get as bankruptcy practitioners usually revolve around whether to file a bankruptcy case before or after the divorce. The sound answer … [Continue reading...]

Bankruptcy and the “hard of hearing”

By Cathy Moran, Esq. Filed Under: Before filing, Counseling clients

You never know just how a client hears your advice, until you hear yourself quoted back to yourself as the reason for a client doing something stupid. In my case, I’m unclear about whether the message received was really as reported, but it’s made me think about my choice of words. I was asked in the initial consultation if gifts of money from the debtor’s parents in … [Continue reading...]

Re-examining The Means Test Cost of Home Ownership

By Cathy Moran, Esq. Filed Under: Means test

The real non mortgage expenses of home ownership are nothing like the means test allowances provided. Bankruptcy lawyers need to rise to the challenge of aligning the means test with today's economic and legal realities. The success of bankruptcy cases may turn on it. What the means test allows The means test provision for non-rent/mortgage costs appears at Line 8 on the B122A-2. It calls … [Continue reading...]

Interspousal Claims Defy The Chapter 7 Discharge

By Cathy Moran, Esq. Filed Under: Family Law in Bankruptcy

Even when the contentions against a debtor-spouse sound in fraud, breach of fiduciary duty, or intentional tort, the claims of the debtor's spouse survive a Chapter 7 discharge. Despite the fact that those sorts of claims against anyone other than a spouse would require a timely filed adversary proceeding to escape discharge. So held the 9th Cir. BAP in Cohen. Building on the unpublished … [Continue reading...]

Sneak Attack On Consumer Rights

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Tax code changes effective in 2018 inflicted a crippling blow to consumers who must sue to enforce their rights. And few have yet noticed. The tax deduction for miscellaneous itemized deductions under IRC Section 212 is gone. So now, consumers who prevail under statutes that award attorneys fees to the successful plaintiff are denied a deduction for the legal expense of winning that … [Continue reading...]

When Laws Collide, You Need The Right Word

By Cathy Moran, Esq. Filed Under: lawyer skills

As lawyers, words are our stock in trade. If we want to describe, explain, or persuade, we need to use the right word. The difference between the almost right word and the right word is really a large matter - 'tis the difference between the lightning-bug and the lightning. MARK TWAIN I was blown away by the casual simplicity and clarity of Ed Boltz's explanation of the … [Continue reading...]

Why listening is a bankruptcy lawyer’s superpower

By Cathy Moran, Esq. Filed Under: lawyer skills

The initial meeting with a prospective bankruptcy client is the most important work I do as a bankruptcy lawyer. It's also the hardest. The results of that meeting lay the groundwork for the entirety of the case. The challenge is establishing rapport with an utter stranger, who's in distress, and persuading them to spill all of their financial secrets and perceived failings. Well-done, the … [Continue reading...]