It started as a means test question: could emergency medical expenses be deemed non consumer debt. It ended up as a step back to get the bigger picture. Well seasoned bankruptcy counsel brought the fact pattern to a list serve of colleagues. The prospective debtors’ income in a small consulting corporation is declining, his health […]
Are You Playing Chapter 7 With A Full Deck Of Cards?
If unscheduled assets are discovered by the trustee, can you dismiss a Chapter 7 case? The question came from the audience of my presentation to bankruptcy lawyers on techniques for the initial interview with the client. It boiled down to: what are the consequences for not doing a skillful job of extracting the whole story […]
Bankruptcy & Divorce: Property Settlements
One change brought by BAPCPA made the choice of chapter in bankruptcy much clearer: the amendment of §523(a)(15). Read with §523(a)(5), now all debts to a spouse, former spouse or a child, incurred in connection with a divorce or separation are non dischargeable in Chapter 7. There’s no longer a balancing-of-the-hardships test for discharge of non […]
The Price Is Not Right
Value, like beauty, is in the eye of the beholder. The value of the debtor’s stuff is colored by their ownership. Get a truer value by asking the client to imagine buying a replacement, just like the one he owns now. Clients cling to old or comfortable ideas of what their personal property is worth. […]
Twelve Ways to Tweak Schedule J
When the debtor’s Schedules J shows a significant number on the bottom line, that “excess income” may suggest the case is an abuse. The first question should always be: “How real are the projected Schedule J expenses”? In districts where the difference between I and J retains some significance in Chapter 7, bankruptcy attorneys need to […]
Beware the Emergency Bankruptcy Filing
Real danger for client and lawyer lurks in the emergency bankruptcy petition: File without all the information about the client’s assets and recent transfers and you risk getting family members sued and the client losing assets. Not to mention your loss of face or worse. Avoidable transfers Chapter 5 of the Bankruptcy Code deals with […]
When To File Bankruptcy
When to file bankruptcy turns out to be just as important as whether to file. I saw it playing out in a single day in my office. All three consultations on Friday featured clients intent on filing bankruptcy IMMEDIATELY. Each of them was certain that they had no time before some disaster would befall them […]
