What New Bankruptcy Lawyers Need To Know: Beyond The Code

What Goes Into The Liquidation Analysis

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The liquidation analysis is central to every form of consumer bankruptcy. Yet too many attorneys think the formula is Assets minus Secured Debts minus Exemptions = Distributable estate Not by a long shot. So let's walk through the elements of a comprehensive liquidation analysis. You need it if you're assessing the vulnerability of assets to the trustee in a Chapter 7. It's one of … [Continue reading...]

Sole Proprietorships In Chapter 7 In Trustee’s Cross Hairs

By Cathy Moran, Esq. Filed Under: Business bankruptcy

Why would a Chapter 7 trustee shut down a sole proprietorship business with no value? That question comes up again and again from newish bankruptcy lawyers who can't imagine that a trustee would demand the closing of the debtor's business. After all, goes the argument, the debtor needs to make a living and the business has no non-exempt value. The trustee's insistance on closing the … [Continue reading...]

One Trait Makes A Bankruptcy Lawyer Great

By Cathy Moran, Esq. Filed Under: Counseling clients, lawyer skills

One trait makes a bankruptcy attorney stand out. Bankruptcy forms promote the view that filing a case is just recording what the debtor owns and owes today. If all you focus on is the here and now, you can assemble a bankruptcy petition. But if there is one, uniform failing in average bankruptcy lawyers, it's that they confine their attention to the here and now-what does the … [Continue reading...]

Rescuing A Troubled Chapter 13: The Unseen Threat

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

We all get sucked in, at some time, to trying to rescue a Chapter 13 bankruptcy case gone bad. Dismiss and refile if often an appealing strategy. But, make sure that you don't let a bad situation get worse. Get your arms around Bankruptcy Code §109(g). When only a do-over will do, don't wait around. Consult with a bankruptcy law attorney if you're unsure about the process and to … [Continue reading...]

What Bankruptcy Counsel Forgot

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

How do you forget capital gains taxes? More easily than you would think, apparently. When I see the same blunder twice in two months and the price tag to the client approaches $100,000, it's time to write about it. It surfaced in two Chapter 11 cases for individuals where I have subbed upon conversion to Chapter 7. My first reaction was to write this as a "see, you shouldn't take … [Continue reading...]

Crushing Tax Change For Injured Consumers

By William Purdy Filed Under: Bankruptcy Practice, Opinionated, Tax

The "Tax Cut Act" actually increased the tax on consumer recoveries. Under the new tax law, most damage awards a consumer recovers stand to go, in large part, to the IRS. So even if you are successful in vindicating your legal rights, the expenses of getting the award aren't deductible from the gross award. The taxing authorities end up getting a large hunk of the total … [Continue reading...]

Delay Division of Community Property At Peril of Bankruptcy

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Put off the division of community property in a marital dissolution at your peril. Hesitate and you risk all of the community property being swept up in a bankruptcy by the other spouse. And you'll have little control where community property assets fall. Community property is all in The threat begins with the bankruptcy law provision that all the community property becomes … [Continue reading...]

700 Words Yield $21K

By Cathy Moran, Esq. Filed Under: Attorneys fees

Have I got a story for you. A rousing tale of schedules, hearings, frustrations, and ultimately fortunes, traceable to a good story in the fee application. Maybe that's a bit overblown, but I'm telling this story with a purpose. Good stories lead to fair compensation for bankruptcy attorneys. Fee applications aren't hard Filing fee applications is central to sustaining an above-average … [Continue reading...]

Parker: Sweet Decision On Stay Violations

By Cathy Moran, Esq. Filed Under: Chapter 13

I don't know just what makes Parker such a treat for me, but it delivers multiple thrills to my bankruptcy lawyer heart. It's a stay violation case with a BIG sanctions award. It's a clearly, simply written opinion that lays out the circuit law on multiple issues. It hits hard at HOA hubris. It analyzes when a claim arises. It looks at surrender and vesting, mysteries near and dear … [Continue reading...]

List It Or Lose It: When Actual Knowledge Isn’t Enough

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

To actually effect abandonment of unadministered assets in a bankruptcy case, the asset in question must appear on Schedule A/B. That's the hard teaching of Stevens v. Whitmore from the 9th Circuit BAP. A passing reference to an asset in the SOFA isn't sufficient. Neither was the fact the trustee explicitly knew about the claim then subject to litigation. If the claim wasn't scheduled … [Continue reading...]

Why Your Bankruptcy Client Doesn’t Understand You (And How To Fix the Problem)

By Cathy Moran, Esq. Filed Under: Before filing

Bankruptcy terminology, so familiar to lawyers, stymies clients. Even common English words seem to flumox our clients. We are a pair, divided by our common language but it can clearly be explained only by the property settlements lawyer in Gosford who are considered to be the best in this field. Even without legal jargon, we talk past each other. Words at war How do we misunderstand … [Continue reading...]

Diaz & The Tax Refund

By Cathy Moran, Esq. Filed Under: Means test

On its face, Diaz (Diaz v. Viegelahn , No. 19-50982 (5th Cir. Aug. 26, 2020)) is a pretty straightforward decision that struck down a local form plan as violating a below-median income debtor's right to use her tax refund to finance necessary expenses for maintenance and support. On a deeper level, it appears to highlight the complications of using the IRS to effect non-tax social policy. In … [Continue reading...]

Ensure You Understand Insurance In Bankruptcy

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Sometimes, issues that you've just skimmed over burst forth in bunches, demanding attention. Lately, that issue in my bankruptcy cases has been insurance. Because its treatment varies so, we need to be asking more pointed questions of clients about both insurance policies and the debtor as beneficiary. Unmatured life insurance Starting with exemptions, §522(d)(7) makes an unmatured … [Continue reading...]

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