What New Bankruptcy Lawyers Need To Know: Beyond The Code

Means Test & The Exemption See-Saw

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

What can my client do with non exempt cash or readily saleable items not protected by an exemption, the newbie asked. As I looked down my list of things to do with excess cash, I saw an issue I hadn't explored before: some of best ways to use up non exempt cash may result in trouble on the means test. My starting point in exemption planning is using the unprotected value to acquire … [Continue reading...]

Means Test Income And The Annual Bonus

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The means test can be seen as a simple form in your bankruptcy petition preparation package - a glorified Form 1040 to be filed with each consumer case - or we can view it as it truly is. The simple becomes hazy, and what we knew coming into this aspect of our practice is persistently uncertain . Even the most seasoned consumer bankruptcy attorney is routinely dumbfounded at the issues that … [Continue reading...]

Clients, Competence & Perjury

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The schedules are signed under penalty of perjury. Just for certainty, let me say it again: your client signs the schedules under penalty of perjury. My partner reported a scene from a 341 meeting she attended while I was on vacation: the case ahead of ours sported a schedule J that was blank, while the debtor had a $4,000 month income. Questioned by the trustee, debtor's counsel replied … [Continue reading...]

Counting to 90

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

This week I have apparently discovered bankruptcy lawyers who can't count to 90. Amazing, isn't it? Yet I've reviewed two cases where counsel failed to file the case such that judgment liens fell within the 90 day preference period. And these were cases where the liens had six figure totals and the debtor had assets. To review: a judgment lien perfected within 90 … [Continue reading...]

Primer on Reaffirmation Agreements

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Every Chapter 7 case with a car loan presents a reaffirmation dilemma. Should the client reaffirm? Should you certify "no hardship"? What happens if the judge rejects the agreement? Dallas bankruptcy judge Stacey Jernigan laid out a primer for attorneys on how it's done and what judges in her district expect from bankruptcy practitioners in a decisions in a case called Grisham, filed … [Continue reading...]

Means Test: Encouraged to Screw Up

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

With the influx of new personnel at the trustee's office, I'm seeing more flat wrong objections from the trustee's office to means test issues. One consistent theme is the assertion that the expense deducted is measured by the past six months. Balderdash. Even after BAPCPA, the means test is a tool for measuring projected disposable income. "Projected" is future. After all, we're supposed to … [Continue reading...]

Four Means Test Mistakes: Taxes

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Are you guilty of any of these means test mistakes dealing with taxes? Using the tax deductions from the pay stubs when your client traditionally owes taxes payable with the return Using the tax deductions from the paystubs when your client traditionally gets a substantial refund Using last year's tax as the measure for the projected taxes when debtor has reduced deductions going … [Continue reading...]

Means Test: Good Enough Isn’t Good Enough

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Early in the life of BAPCPA, I sat down to review a means test with a new bankruptcy lawyer. The first part of the form seemed to be complete and make sense, but as I worked my way deeper into the document, unexpected lines were blank, or numbers were small relative to my expectations. Doesn't the client have health care expenses, taxes, internet service, I asked? The reply: I've gotten to … [Continue reading...]

Maximizing the Initial Client Interview

By Cathy Moran, Esq. Filed Under: Before filing, Start Here

The first meeting with a bankruptcy prospect is the best and hardest work I do. It's probably the most important as well. I use it to figure out what the issues in the case are, what the client's goals are, and to convey what I will need from the client to produce a successful outcome. Everything thereafter is just detail. The information that's important Before I get to debt … [Continue reading...]

Newbie Summer Reading: Rake v. Wade

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

One more case before summer's over: Rake v. Wade. This one is interesting because it dealt with a central issue in Chapter 13: whether the Bankruptcy Code requires payment of interest on mortgage arrears (which are usually themselves mostly interest) even when the underlying loan documents do not provide for interest on arrears. And even more interesting, the effect of the decision had an … [Continue reading...]

Bankruptcy and Offers in Compromise

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

This one is for Lex and Gail and follows up on Peeling the Onion, about the client who was counting on the IRS compromising their priority tax debt just as their income jumped. First, get the lingo right: it is an offer IN compromise, not an offer AND compromise. In general, the IRS will not negotiate an offer while a debtor is in bankruptcy. I have been successful once in 30 years in … [Continue reading...]

Breaking Up Earlier Rather Than Later

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

I ended up representing a crazy because I had an attorney/client relationship with him when he discovered that the foreclosure sale was 48 hours off. I needed to have taken my own advice about deselecting clients who won't take your advice. My concern here, both personally and professionally, was that I thought risky to say, two days from the foreclosure sale, that I would not represent this … [Continue reading...]

Newbie Summer Reading: How Lamie

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Bankruptcy cases you need to know by name include Lamie, the Supreme Court's 2004 pronouncement on attorneys fees for debtor's counsel. Petitioner represented a Chapter 11 debtor whose case was converted to Chapter 7. After conversion, Mr. Lamie filed amended schedules, and reports on changes in assets and debts since the commencement of the case. He didn't represent the Chapter 7 trustee nor … [Continue reading...]

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