What New Bankruptcy Lawyers Need To Know: Beyond The Code

Is The Debtor Lost In Space?

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Business bankruptcy skills, continued. The business lease often stands at the center of the troubles of a struggling business. Ask the right questions, or better yet, read the document yourself, and you can outline choices for your client. There's no straight line through this topic, so let's head off. Who is lessee? Even when the business is operated by a corporation, the lessee on the … [Continue reading...]

Corporate Chapter 7: The Other Side Of The Coin

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The reasons not to file a Chapter 7 for a failing corporation crowded my last post. My point was that just because the person in your office thinks his corporation should file bankruptcy, it may not be so. Today: the situations where it might be worth the downside risks to file a 7 for a client's corporation. Because, like most issues in advising real people, corporate and corporeal, it … [Continue reading...]

Four Dangers In Bankrupting A Corporation

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

If the whole point in bankruptcy is getting a discharge of your debts, it's obvious why corporations don't need Chapter 7 filings: Corporations don't get discharges. (a) The court shall grant the debtor a discharge, unless— (1) the debtor is not an individual; § 727 Chapter 7 is so closely associated with financial failure and finality that you often interview a client who thinks bankruptcy is … [Continue reading...]

Is Your Bankruptcy Client’s Business Worth Saving?

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Your client's business is going under. What should I do? he asks of you. Return the favor with a question of your own, the third in my trio of gating inquiries: Would the business outlook be better if you weren’t servicing debt from the past? Fight or flee Before you can craft a plan, you need to assess the underlying problem in the business. There is no bankruptcy remedy for a poor product, an … [Continue reading...]

Who Is On The Hook For Debts?

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

When the person sitting in your office runs a struggling business, I proposed three initial questions to scope out the bankruptcy options available. (The first question.) The second question applies only if the business is operated by an entity ( a corporation or an LLC) How much of the debt it services is the entity really liable for? Dig a bit and you will often find that the corporation … [Continue reading...]

Is Your Debtor Corporate or Corporeal?

By Cathy Moran, Esq. Filed Under: Business bankruptcy

Mitt Romney famously insisted that corporations are people. We can disagree about the nature and quantum of rights that gives them relative to human beings, but for the purposes of a business bankruptcy analysis, Mitt was spot-on. A corporation is a legal person separate from the individuals who own the stock in the corporation. When the human across the table from you uses the first … [Continue reading...]

Get A New String To Your Bankruptcy Bow

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Success in the business of bankruptcy law lies in not chasing the run of the mill cases. Lots of your competitors want the same simple (or apparently simple) cases. The downside to those cases is that the clients are less sophisticated and the market effectively caps what you can charge. Fewer of your competitors are prepared to do a business bankruptcy well. Business failures are a … [Continue reading...]

Mortgage Forgiveness Tax Break Renewed

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The tax break protecting homeowners from phantom income when their homes are foreclosed was reauthorized in the last minute fiscal cliff bill. The problem is rooted in the tax code provision that treats debt that is cancelled as if it were income. While debt cancelled in a bankruptcy case is an exception to the rule, homeowners who lost their homes and had debt cancelled as a result were … [Continue reading...]

Mastery Favorites From 2012

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Less than a week to go in 2012. Rather than float a new idea, I looked back at Bankruptcy Mastery for the past year for my favorite posts. I'm finding it's like asking a mother which of her kids is her favorite. It's a fundamentally unfair question. Some posts I like because they went together well, technically. Others I like because I'm passionate about the subject matter. And … [Continue reading...]

The Best Reason To Reduce Chapter 13 Payments

By Cathy Moran, Esq. Filed Under: Chapter 13

Chapter 13 debtors need health insurance

When life intervenes during the course of a Chapter 13 case, we can modify the debtor's Chapter 13 plan. As I laid out the provisions of §1329 on modifications for that post, I saw the hand of the late Senator Ted Kennedy in this section. I talked earlier here about his role in providing a deduction on the means test for health and disability insurance that a debtor ought to have but might … [Continue reading...]

When The Chapter 13 Plan Has A Flat

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The Chapter 13 completion rate for confirmed plans in San Jose is 65%. Nationally, it's about 35%. So, how do we do it? Lots has to do with the approach of our trustee, Devin Derham Burk and the on-going liaison between the bench and the bar. But at bottom, it's a skillful and cooperative bar of bankruptcy lawyers who recognize that the lawyer's role does not end at … [Continue reading...]

Don’t File Bankruptcy (Now)

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Timing is everything. Hitting a round ball with a cylindrical bat is a matter of timing. Bankruptcy practice is no different. Picking when to file a client's case may be as important as the decision to file or the choice of chapter. As we approach year's end, taxes pop to mind as a reason not to file now, but next year, even January 2nd. Why? Because if your client expects to owe … [Continue reading...]

5 Tricks For Bankruptcy Exemptions

By Cathy Moran, Esq. Filed Under: Exemptions

I've spent hunks of the past couple of days working exemption issues in cases we're filing. California has opted out of the federal bankruptcy exemptions but has a bankruptcy-only set of exemptions that largely mirror the federal bankruptcy exemptions. My typical client this year has substantially more income and more assets than the people I was seeing two years ago. Today's client … [Continue reading...]

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