Bankruptcy Mastery

Becoming a better bankruptcy lawyer

Near Sighted Leading the Blind

By Filed Under: Bankruptcy Practice

When a trainer of bankruptcy paralegals writes about clients failing the Chapter 13 means test,  I blanch, or worse. We had a couple who originally wanted to file a Chapter 13 so they could keep their home. However, they were unable to pass the Means Test. The calculation of the debtor's monthly disposable income on the B-22C form is a necessity.  It is supposed to measure the debtor's … [Continue reading...]

Amended Bankruptcy Rule Provides More Time

By Filed Under: Bankruptcy Practice

venus flytrap with victim

One of the traps for debtors instituted with BAPCPA is the provision that an individual's bankruptcy case be closed without a discharge if  proof of  completion of a financial management class is not timely filed. Rule 1007(b) requires the filing of the certificate of debtor education as among the debtor's duties.  Section 727(a)(11) provides that the discharge can be withheld for failure to … [Continue reading...]

Ask “Why Me?” When It’s Chapter 11

By Filed Under: Bankruptcy Practice

Young bankruptcy attorney was approached to file a Chapter 11 for an LLC developing a condo complex, with a foreclosure sale looming.  Should they take the case, she asked me. For all the reasons I've written before, I thought no, not this case, not now.   After we discussed the difficulties of a single asset case with no regular income and a secured lender intent on foreclosing, it occurred to … [Continue reading...]

Household Size Vanishes From Means Test Form

By Filed Under: Bankruptcy Practice

Drafters of the official bankruptcy forms have excised "household size" from the B-22 where we calculate the part A IRS standard allowances.  In its place is "applicable number of persons", which the form indicates is the number of exemptions the debtor would currently be allowed on their tax return plus the number of other persons the debtor currently supports. Did the courts reject "heads on … [Continue reading...]

Rich Personal Finance Resource For Clients

By Filed Under: Bankruptcy Practice

Introduce your clients to Money Health Central, a sound source of ideas and tools for those struggling with debt or looking to reorient their financial lives after bankruptcy. I know it's good stuff because I write it with 5 good friends who are also bankruptcy lawyers.  This isn't a site about how bankruptcy works, but rather about how personal finance works.  Recent posts that might be useful … [Continue reading...]

Swimming Upstream Against The Current of Client Optimism

By Filed Under: Bankruptcy Practice

Inflated value provided by client  in bankruptcy schedules comes back to bite debtor when Chapter 13 plan collapses. The client's case was driven by substantial taxes and a vehicle she just had to keep.  The asset mix included a timeshare which, even at the start of the recession, she valued at far more than I suspected it was worth.  I challenged the client's number, but didn't persist in the … [Continue reading...]

Taxes, Bankruptcy & The New Year

By Filed Under: Bankruptcy Practice

Consider delaying the filing of  Chapter 13 cases where the debtor expects to owe taxes for 2010 til January.  Otherwise the tax for 2010 is a post petition debt not easily payable through the Chapter 13 plan. It's December and I'm trying to be thorough in asking Chapter 13 prospects whether  they will owe taxes for the current year.  Income  taxes are not owed until the end of the tax year.   … [Continue reading...]

Where Are The Answers For The Consumer Bankruptcy Lawyer?

By Filed Under: Bankruptcy Practice

Tell me what to read if my client has  Issue A, and what to read if they have Issue B, the rookie bankruptcy lawyer asked. Other readers voice the same plaint:  tell me where the answers are for practicing bankruptcy law. Well, I have some good news and some bad news.  The bad news is that there is no single source, or collection of universal answers, or instant how- to manual for bankruptcy … [Continue reading...]

The Rules Change

By Filed Under: Bankruptcy Practice

December 1, the Federal Rules of Bankruptcy Procedure change. If you can't tell the players without a program, you can't practice bankruptcy law without having a handle on the federal rules.  Then, of course, you need to see what the local rules add, but that's another story. Here's the list of rules that change. Image courtesy of ttarasiuk … [Continue reading...]

Thanks Be

By Filed Under: Bankruptcy Practice

Professionally, what am I thankful for? I'm thankful for experience and a skill set useful in terrible economic times. I'm thankful for bankruptcy laws, flawed as they are, that allow people to escape debt and focus on the future. I'm thankful for an honest judiciary and panel trustee system that give the system integrity. On a less lofty note, I'm thankful for computers and the … [Continue reading...]

Consumer Debt Label Matters in 13

By Filed Under: Chapter 13

Consumer debt?  Non consumer debt?  Have mostly non consumer debt and you get a pass on the means test.  Where else does the consumer/non consumer characterization matter:  in Section 1301, where co debtors on a consumer debt are protected by the automatic stay. Section 1301 limits the scope of the co debtor stay to consumer debts and protects individuals liable with the debtor on the debt … [Continue reading...]

Number One Reason to Avoid Taking a Chapter 11

By Filed Under: Bankruptcy Practice

Put aside inexperience:  the most important reason not to take on a Chapter 11 is that it can kill your practice. The rules and procedures for Chapter 11 were created for the debtor "big boys", the corporations that hire tall-building lawyers by the score.  There are innumerable hoops to jump through, even if you were familiar with each hoop and had a template for the exercise.  The  shear … [Continue reading...]