Bankruptcy lawyers occasionally are confronted with the client with non-exempt cash, or other marketable assets, worth more than the available exemptions to protect them. And state exemption systems often protect the darndest things, like a mule and a plow. A milk cow. The family bible. Those aren’t the things most of us are striving to […]
Bankruptcy’s Means Test Doesn’t Apply to All
New bankruptcy lawyers sometimes forget in the flurry over getting the means test right that it only applies when the debts are primarily consumer. Primarily means over half in dollar amount. The code defines consumer debts in §101(8) as debt incurred for a personal, family or household purpose. You may be surprised by the kinds […]
Assets in Bankruptcy Pose Valuation Issues
A bankruptcy lawyer seems to often have the unpleasant task of telling a debtor that their possessions have little value. I don’t know whether it’s a defense mechanism or just ingrained thinking, but I have clients tell me all the time that their assets have values far beyond what seems likely in the current market. […]
Bankruptcy Procedure Question? Ask a Clerk
The bankruptcy judge ordered me to get the signature of an absent party on the written version of the order just made from the bench. So, what to do when that party was unwilling to sign? When the judge signed the order anyway, opposing counsel complemented me on knowing how to deal with the problem. […]
Develop a Bankruptcy Filing Checklist
As bankruptcy lawyers, we don’t usually face the life and death situations that doctors do, but we do take our client’s financial lives in our hands. For their sakes, and ours, we want to get it right. Which is why I found Atul Gawande’s book The Checklist Manifesto compelling. The premise of the book is […]
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), […]
Alternative to Bankruptcy: Do Nothing
Bankruptcy lawyers sometimes forget: not everyone worried about debt actually needs to file bankruptcy. The anxiety that brings someone to your office may not be grounded in a real understanding of the rights of their creditors. I recently saw a woman drawing disability pay and looking at very substantial retirement income. It seemed unlikely that […]
