When The Means Test Is Meaningless

A local bankruptcy attorney stumbled over the most basic part of the  means test. Just this week…  nearly 15 years after the bankruptcy “reform” act of 2005. I thought we were several years past bankruptcy attorneys  clueless about the means test. But apparently not. This fine fellow told a couple that they couldn’t file Chapter […]

How To Brush Off The Means Test

There’s a way around the means test.  And it’s right there in the Code.  Yet we forget. The ***x!!XXX thing only applies to debtors whose debts are primarily consumer. Consumer debt is defined: 8) The term “consumer debt” means debt incurred by an individual primarily for a personal, family, or household purpose. I had to […]

Tax Changes & Projected Expenses

  At the risk of borrowing trouble, I’m looking ahead to changes to the tax laws that may adversely impact pending Chapter 13 cases. The 2017 Tax Cuts and Jobs Act ( probably as appropriately named as the Bankruptcy Abuse and Consumer Protection Act)  limits the deductibility of state and local taxes, including property taxes.  A […]

Getting Means Test Tax Projections Right

The means test tax deduction offers fertile ground for passing the means test. But mention tax calculations to a bankruptcy attorney and 7 out of 10 freeze on the spot. I’m not a tax attorney, they retort. That’s right, but, if you are a bankruptcy attorney, that doesn’t relieve you  from knowing enough tax to […]

Marital Adjustment: Everything But The Kitchen Sink

Not every expenditure that benefits the debtor’s household or his family is a household expense. And, if it’s not a household expense, it doesn’t get added to CMI in a single spouse bankruptcy filing. That’s how the marital adjustment should work. But it’s not so simple. Household expense is not an expansive definition After last week’s […]

Get Your Client Out Of The Means Test Jail

  As much as the means test is a pain in the neck, why don’t more bankruptcy attorneys skip it? Finding that your client’s debts are not “primarily consumer” is an instant, get-out-of-jail-free card. If you can check the B-22A box that the debts are not primarily consumer debts, you get to skip the rest […]

When The Means Test Is Not So Mean

  It isn’t often that the newspaper provides ideas for this site, whose focus is polishing new bankruptcy lawyers. But a story on the surge in cost for health insurance based on a study by the Commonwealth Fund reminded me to remind you:  the means test allows deduction for the cost of health insurance, even […]