What New Bankruptcy Lawyers Need To Know: Beyond The Code

Untangling The Converted Bankruptcy Case

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Chapter 13, Counseling clients

Conversion to Chapter 7 from Chapter 13 usually comes amid some sort of train wreck. The debtor has defaulted on plan payments, decided to surrender the house, or even got a loan modification that allows him to keep the house. Often, there is pressure to convert the case before it is dismissed. In the bustle, don't forget to counsel the debtor on the differences between 13 and 7. Big … [Continue reading...]

Bankruptcy & Divorce: A Disruption In The Force

By Cathy Moran, Esq. Filed Under: Family Law in Bankruptcy

When bankruptcy law and family law intersect, the result can be liberating or disruptive, depending on the timing of a bankruptcy filing and the goals of the parties. An infinite number of combinations lead to infinite different outcomes. The variables start with whether bankruptcy occurs before or after status is altered; before or after the division of the property; the choice of … [Continue reading...]

Unfair Loan Modification Practices Rejected By 9th Circuit

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Cases new & significant, Real property

Promising a loan modification and failing to deliver, after pocketing trial mod payments, isn't fair, said the 9th Circuit in Oskoui. And if it isn't fair, it can be actionable under California's Unfair Competition Law (B&P 17200). Not to mention constituting a breach of contract. Thus, there do seem to be some limits on the shenanigans a lender or mortgage servicer can engage … [Continue reading...]

Shadow Players May Have Support Claims In Bankruptcy

By Cathy Moran, Esq. Filed Under: Family Law in Bankruptcy

What we know so far about domestic support obligations in bankruptcy is that they are non dischargeable and the bankruptcy court has the last word as to what is and is not support. But we just scratched the surface in looking at support when we considered obligations from one spouse to another. Debts owed to an extended cast of supporting characters may be "support" as well, non … [Continue reading...]

Getting Means Test Tax Projections Right

By Cathy Moran, Esq. Filed Under: Means test, Tax

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 get the means test right. Not to mention not giving up your client's … [Continue reading...]

When Chapter 13 Debtors Run Amok

By Cathy Moran, Esq. Filed Under: Counseling clients

We've had a string of them.... [Hint: in a small practice, a "string" means "three. " ] But three clients in the past month with confirmed Chapter 13 plans have contracted to sell their homes without mentioning it to us, their attorneys. The degree of chaos varied: inadequate time to get approval of the sale from the trustee within the contractual closing date; … [Continue reading...]

Proofs of Claim, Res Judicata, And A Good Night’s Sleep

By Cathy Moran, Esq. Filed Under: lawyer skills

Trouble shared is trouble halved. Brainy Quotes attributes that bit of wisdom to writer Dorothy Sayers. (Also to Lee Iacocca; take your pick). One of the things that keeps me troubled at night is the preclusive effect of a filed proof of claim. So, I'll share my worries, and you can worry too. Filed claims deemed allowed Bankruptcy Code 502(a) is the source of the … [Continue reading...]

How Lien Stripping Differs From Lien Avoidance

By Cathy Moran, Esq. Filed Under: Real property

The draft of a lien avoidance motion my paralegal presented me was garbled. Lien stripping concepts sat next to a cite to §522. I doubt my staff is alone in missing the critical differences between lien stripping under (or despite) §1322 and lien avoidance pursuant to §522(f). So let's try some compare and contrast on liens we want to excise. Avoid liens that impair … [Continue reading...]

Use All Channels to Educate Bankruptcy Debtors

By Cathy Moran, Esq. Filed Under: Counseling clients

The skill set of a consumer bankruptcy lawyer must include a healthy dose of the skills of a teacher. The client has to master any number of legal issues and procedures to make informed decisions about the case. An effective lawyer has a plan for how to convey all those things the debtors need to know. As the parent of children with learning disabilities, I learned that each … [Continue reading...]

The Change We Need In Consumer Bankruptcy Practice

By Cathy Moran, Esq. Filed Under: Opinionated

The American Bankruptcy Institute under the leadership of retired Judge Eugene Wedoff is gathering input for a review of changes needed in consumer bankruptcy law. I was privileged to offer my thoughts at NACBA's 25th annual convention in May. Good Morning, I'm Cathy Moran. I've practiced bankruptcy law in the Silicon Valley, in California's Northern District, for 37 years. I've … [Continue reading...]

Hammered By Rule 3002.1

By Cathy Moran, Esq. Filed Under: Real property, Rule 3002.1

To my mind, Rule 3002.1 is the most powerful, most under-utilized tool in our tool box. And its power is coming to the fore as Chapter 13's filed during the Great Recession wind to a close. Don't let your home-owning client leave Chapter 13 without a determination that they are current. Or, if they are not current, without a plan for addressing the default. Rule spotlights mortgage … [Continue reading...]

Corporate Bankruptcy: So We Can Start Over

By Cathy Moran, Esq. Filed Under: Business bankruptcy

Thou shalt not file bankruptcy for a corporation. It's almost a commandment from on high in my practice. But for every rule, there is an exception and the man sitting in front of me called on the exception. He wanted, (or really "needed") to stay in the same line of construction work. But business was bad, there was a supplier suing the corporation, and then there was that pesky, … [Continue reading...]

Bubble, Bubble, Toil and Trouble

By Cathy Moran, Esq. Filed Under: Opinionated

I find I'm back at the Bankruptcy Mastery keyboard. Several years ago I thought I had said all there was to say here to new bankruptcy lawyers. But stuff just keeps bubbling to the forefront and my fingers itch. It seems there's more to say, perhaps not exclusively to newbies, but to the broader community of consumer bankruptcy lawyers. What's up in bankruptcy The law is changing. … [Continue reading...]

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