Bankruptcy debtors with delinquent utility bills got a measure of protection from interruption in their service under an amendment to the Bankruptcy Code in the omnibus spending bill enacted December 27,2020. Individual debtors cannot have their utilities disconnected as long as they make some payment for service provided after filing promptly after the commencement of […]
Chapter 13 Discharge Expanded by COVID Relief Legislation
Chapter 13 debtors got a huge “gift” among the COVID relief provisions of the Consolidated Appropriations Act of 2021, signed December 27, 2020 by the president. Debtors may get a full -compliance discharge of dischargeable debts if they have a residential mortgage and have not made all the payments required by their plan. See the […]
Cars & Bankruptcy: What You Must Know To Get It Right
It’s time for a summary and refresher on dealing with car loans in bankruptcy. Somehow, my staff hit a wall this week on what information we needed about cars and car loans. Then, we stumbled on what to do with that information. So, here’s my roadmap to cars in bankruptcy. Fasten your seat belt: here we […]
The Means Test Allows Health Care Before Creditors
Health insurance is an allowable means test deduction, even if the debtor doesn’t currently have health insurance. In my view, the sweetest words in an otherwise miserable bankruptcy means test are found buried in a long paragraph of ยง707(b)(2)(A)(ii)(1): The debtor’s monthly expenses “shall include reasonably necessary health insurance, disability insurance and health savings account expenses…” […]
Projecting Means Test Tax Expense When Things Change
Bankruptcy means test tax projections get more complicated when the year of filing situation looks much different than the last year. If the financial situation is essentially unchanged and all you have to do is adjust for a tax refund or a tax liability, it’s little more than dividing the refund or tax due by […]
Juggling in Defense of the Tax Refund
As long as clients use tax withholding as a form of savings account, bankruptcy lawyers will have to juggle to protect that refund when bankruptcy looms. Limber up, and let’s look at a fact pattern I faced with a December client who needed to file, but faced no immediate crisis. The point for analysis was […]
Tax Traps 1095 Days Out
When it comes time to discharge 2019 taxes in bankruptcy, the IRS has laid a trap. The trap snaps shut three years (or 1095 days) from now. At that point, the familiar three year rule for tax dischargeability won’t be so simple. Between Covid, wildfires, and hurricanes, the IRS has unilaterally extended tax filing deadlines. […]
