What New Bankruptcy Lawyers Need To Know: Beyond The Code

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: Exemptions

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 insurance policies and the debtor as beneficiary. Unmatured life insurance Starting with exemptions, §522(d)(7) makes an unmatured life … [Continue reading...]

6 Steps to Ethical Unbundling of Bankruptcy Representation

By Cathy Moran, Esq. Filed Under: Attorneys fees

No matter how many hoops the client dutifully jumped through, without adequate inquiry and communication, the bankruptcy attorney was slammed for unbundling his services. The representation agreement at issue excluded representation in any adversary proceeding filed, as do most such agreements, I imagine. The client initialed every paragraph of the 19 page representation agreement, and the … [Continue reading...]

Reaffirmations Impose Impossible Demands On Bankruptcy Counsel

By Cathy Moran, Esq. Filed Under: Counseling clients

When BAPCA gutted the ipso facto clause, reaffirmation was left as the only way a debtor could be assured of retaining his wheels. Car lenders took sides back then, then changed sides, on whether they would automatically repossess a vehicle when the debt was not reaffirmed. Some wanted the in terrorem effect of losing the car to spur reaffirmations and the full panoply of legal … [Continue reading...]

Hearsay Exception: How Do I Get This Into Evidence?

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, lawyer skills

Quick: tell me everything you know about Federal Rule of Evidence 803(17)! If you're like me, there's deafening silence. I've apparently skated through forty years of bankruptcy practice without really considering how Kelly Blue Book figures get into evidence. If it worked, I just went on. (Hint: it's FRE 803(17). But a change in California homestead law, and a nudge from Judge Stephen … [Continue reading...]

Wrestling With The Means Test

By Cathy Moran, Esq. Filed Under: Means test

The timeless questions asked by mankind include "why are we here", "which came first..." and "coffee or tea". Bankruptcy lawyers wrestle with "which controls, b-22 or Schedules I and J". My argument is: if Congress wanted a means test, then the means test controls, unless you show special circumstances. But if I minus J controls, then every time the means test doesn't work as some … [Continue reading...]

Unpacking The Enhanced California Homestead

By Cathy Moran, Esq. Filed Under: Exemptions

On January 1, 2021, California's homestead exemption grew from a prior low of $75,000 to a minimum of $300,000, to as much as $600,000, depending on county wide home prices. And the homestead floor and ceiling adjust annually for inflation. A big part of the change is that the increased homestead is available to homeowners regardless of age, health, or marital status. But with the increase … [Continue reading...]

Your Help Needed With Consumer Attorney Fee Survey

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Can I assume you'd like some authority to back up your next application for fees? The US Consumer Law Attorney Fee Survey Report , published for 20 years by Ron Burdge provides just that authority. It's free and far ranging. So, do your part by taking the survey online to get current information on fees in multiple areas of consumer law. The more people that participate, the more … [Continue reading...]

Delinquent Utilities and Disconnection Under New Bankruptcy Provision

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Bankruptcy debtors with delinquent utility bills got a measure of protection from interruption in their service under an amendment to the Bankruptcy Code in the omnibus spending bill enacted December 27,2020. Individual debtors cannot have their utilities disconnected as long as they make some payment for service provided after filing promptly after the commencement of the case. The newly … [Continue reading...]

Chapter 13 Discharge Expanded by COVID Relief Legislation

By Cathy Moran, Esq. Filed Under: Chapter 13

Chapter 13 debtors got a huge "gift" among the COVID relief provisions of the Consolidated Appropriations Act of 2021, signed December 27, 2020 by the president. Debtors may get a full -compliance discharge of dischargeable debts if they have a residential mortgage and have not made all the payments required by their plan. See the text of new subsection below. While generous in intent, the … [Continue reading...]

Cars & Bankruptcy: What You Must Know To Get It Right

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

It's time for a summary and refresher on dealing with car loans in bankruptcy. Somehow, my staff hit a wall this week on what information we needed about cars and car loans. Then, we stumbled on what to do with that information. So, here's my roadmap to cars in bankruptcy. Fasten your seat belt: here we go. Car value A reliable value for the car is essential in any form of … [Continue reading...]

The Means Test Allows Health Care Before Creditors

By Cathy Moran, Esq. Filed Under: Means test

Health insurance is an allowable means test deduction, even if the debtor doesn't currently have health insurance. In my view, the sweetest words in an otherwise miserable bankruptcy means test are found buried in a long paragraph of §707(b)(2)(A)(ii)(1): The debtor's monthly expenses "shall include reasonably necessary health insurance, disability insurance and health savings … [Continue reading...]

Projecting Means Test Tax Expense When Things Change

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Bankruptcy means test tax projections get more complicated when the year of filing situation looks much different than the last year. If the financial situation is essentially unchanged and all you have to do is adjust for a tax refund or a tax liability, it's little more than dividing the refund or tax due by 12 and making that adjustment to the current withholding. But what if things … [Continue reading...]

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