What New Bankruptcy Lawyers Need To Know: Beyond The Code

Today’s AI Stands To Create Work For Consumer Lawyers

By Cathy Moran, Esq. Filed Under: lawyer skills

Most lawyers were torn between wincing and laughing when a lawyer filed a brief packed with case authority created out of whole cloth by an AI bot. Meanwhile, a segment of the bar is fretting that we will be replaced by powerful artificial intelligence. My concern, based on a couple of casual forays into AI, is not that I will become redundant, but rather that I will spend my professional life … [Continue reading...]

The Neglected Non-dischargeability Provision

By Cathy Moran, Esq. Filed Under: Counseling clients

Hands up, everyone who has encountered a claim that a debt is non-dischargeable by reason of §523(a)(14). That's what I thought: nada, or next thing to it. Despite watching for it, I hadn't seen one til this year when AmEx filed an adversary in a case in which I was peripherally involved. My copy of Colliers code doesn't even comment on any (a)(14) cases. So, what's this about credit … [Continue reading...]

Is This Corporation Really Separate From Its Owners: A Checklist

By Cathy Moran, Esq. Filed Under: Business bankruptcy

In a perfectly-executed world, clients who do business via an entity like a corporation or LLC would arrive with their business life neatly separated from their personal lives. However, that's not the world I practice in. It's probably not yours, either. Instead, I have to sleuth out the facts, and compare them to the individual's version. I see prospective debtors where the business … [Continue reading...]

Are 401(k) Contributions Disposable Income Or Not?

By Cathy Moran, Esq. Filed Under: Means test

For a system that is supposed to rehabilitate personal finances and set debtors back on their feet, Chapter 13 nationwide is schizophrenic about on- going retirement savings. We're divided about whether post petition contributions to retirement accounts preclude confirmation of a Chapter 13 plan. Are 401(k) Contributions Disposable Income Or Not? Too many courts, in my opinion, come down … [Continue reading...]

Bankruptcy Law Trumps State Protection For Judgment Lien

By Cathy Moran, Esq. Filed Under: Exemptions

State law insulated a recorded judgment lien from future increases in the homestead exemption. However, bankruptcy law trumps that limitation, says the 9th Circuit in Barclay v. Boskoski. [T]he Bankruptcy Code requires courts to determine the amount of the exemption to whichthe debtor would have been entitled in the absence of the lien at issue The issue was literally a half-million … [Continue reading...]

Finding the Flaws in IRS Tax Liens

By Cathy Moran, Esq. Filed Under: Tax

Tax liens in bankruptcy sometimes don't stand up to close scrutiny, to the delight and profit of bankruptcy debtors. I was reminded of two such instances by the excellent presenters at the NACBA 2021 Workshop. Lien perfection follows state law The secret tax lien attaches to all of a taxpayer's property of any kind, wherever located. However, a tax lien is perfected against other creditors … [Continue reading...]

Marital Adjustment: Everything But The Kitchen Sink

By Cathy Moran, Esq. Filed Under: Means test

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 During a NACBA presentation on challenges where only one … [Continue reading...]

Brace & Beyond: Joint Tenancy & Transmutation

By Cathy Moran, Esq. Filed Under: Real property, Strictly California

For Californians, the CA Supreme Court's decision in Brace upended our understanding of joint tenancy and community property. For decades, we "knew" that a property couldn't be both joint tenancy and community property . Siberell. And for those of us in the 9th Circuit, we "knew" that when married folks acquired property with title taken as joint tenants, the property was characterized as the … [Continue reading...]

Is Your Law Practice Evolving To Incorporate New Technology

By Jay Fleischman Filed Under: business of law

When the world was forced to adjust to new routines in March 2020 due to the global pandemic, I was instantly struck by how little my professional life changed. I'd worked remotely for over a decade, and my systems and procedures didn't change. Sadly, the same couldn't be said for many of my fellow consumer bankruptcy lawyers. I watched many of them struggle with remote videoconferencing … [Continue reading...]

Siegel, Claim Preclusion & Me

By Cathy Moran, Esq. Filed Under: lawyer skills

I've been having nightmares about the 9th's Circuit's decision in Siegel for 20 years. Broad strokes, Siegel (143 F.3d 525 (9th Cir. 1998) holds that a filed claim in a no asset bankruptcy case to which no one objects is entitled to preclusive effect in subsequent litigation by reason of Bankruptcy Code §502. In Siegel, the debtor filed a no-asset Chapter 7; nonetheless, his lender filed … [Continue reading...]

How To Bankruptcy-Proof A Divorce Settlement

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

Chapter 13 bankruptcy can discharge non support obligations associated with a divorce that are non-dischargeable in Chapter 7. That's worth repeating: any marital settlement agreement or court judgment that calls for payment or indemnity by one spouse to the other in the future is potentially vulnerable to a subsequent bankruptcy filing by the obligor-spouse. While obligations deemed to be … [Continue reading...]

The Complex World Of Interspousal Claims In Bankruptcy

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

Traps and grey areas abound when one spouse files bankruptcy during or after a divorce. Inattention by the non-filing spouse can result in the bankruptcy discharge of spousal claims that might actually be nondischargeable. One of those traps involves the differing treatment in bankruptcy of debts to a former spouse incurred in the course of a divorce (Bankruptcy Code §523(a)15)) and debts for … [Continue reading...]

Lien Avoidance In Bankruptcy: The Questions You Need To Answer

By Cathy Moran, Esq. Filed Under: Exemptions

Black letter law says liens pass through bankruptcy unchanged. But the better statement adds a single word: unless. Liens survive bankruptcy intact unless....unless you take some action to void them. One tool to void liens lives in §522(f). Its location in Chapter 5 tells you that it's available to any individual debtor who is entitled to claim exemptions. The more you know about the … [Continue reading...]

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