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The Means Test Allows Health Care Before Creditors

By Cathy Moran, Esq. Filed Under: Means test

Means test surprise

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…” […]

Filed Under: Means test Tagged With: health insurance

Projecting Means Test Tax Expense When Things Change

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

means test taxes

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 […]

Filed Under: Bankruptcy Practice

Juggling in Defense of the Tax Refund

By Cathy Moran, Esq. Filed Under: Before filing, Tax

protecting 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 […]

Filed Under: Before filing, Tax

Tax Traps 1095 Days Out

By Cathy Moran, Esq. Filed Under: Tax

discharge 2019 taxes

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. […]

Filed Under: Tax

New California Homestead in Action

By Cathy Moran, Esq. Filed Under: Exemptions, Strictly California

homestead exemption

The California homestead just changed, for the better, but it raised questions about how the single change affected the rest of the law. The newly enacted version of California Code of Civil Procedure 704.730 replaces the previous homestead system that pegged the amount of the available homestead to family relationships, including marriage, to age, or […]

Filed Under: Exemptions, Strictly California Tagged With: 2020, exemptions

Reasons Not To Choose Business Bankruptcy

By Cathy Moran, Esq. Filed Under: Business bankruptcy

danger corporate bankruptcy

Bankruptcy preference avoiding powers constitute a serious reason not to choose a corporate bankruptcy to close a failing business. Yet, preferences and the trustee’s ability to recover them have to be one of the hardest concepts to convey to business clients. Clients gag at the thought that paying a genuine debt before a bankruptcy filing […]

Filed Under: Business bankruptcy

Tax Audit Aftermath-Did You Tell The State?

By Cathy Moran, Esq. Filed Under: Tax

discharge taxes

One of the bedrock requirements of the discharge of taxes in in bankruptcy is the requirement to have filed a return. No return, no discharge of that year’s taxes. But it gets more nuanced:  in California, when the feds audit the debtor and change any of the elemental figures in a filed return return, the taxpayer […]

Filed Under: Tax Tagged With: 2017, tax audit

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