Means Test: Good Enough Isn’t Good Enough

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 […]

Bankruptcy Abuse & Schedule J

The debtor passed the means test but lost a motion to dismiss for abuse of the bankruptcy system.  Schedule J, the debtor’s projected future expenses, showed a monthly excess of $500.  Dollars to doughnuts, the debtor’s bankruptcy lawyer followed the form and the budget provided by the client.  Dismissal resulted. What happened here?   Two […]

Bankruptcy Dollar Amounts Changed April 1

Bankruptcy Code sections that reference a dollar amount, such as the threshold for a presumption of abuse on the means test or the cap on Chapter 13 debts, were adjusted effective April 1, 2010.  This change occurs every three years and is tied to the Consumer Price Index. Here’s a table of the changes in […]

Bankruptcy’s Means Test Doesn’t Apply to All

New bankruptcy lawyers sometimes forget in the flurry over getting the means test right that it only applies when the debts are primarily consumer. Primarily means over half in dollar amount. The code defines consumer debts in §101(8) as debt incurred for a personal, family or household purpose. You may be surprised by the kinds […]

Taxes Owed from Day One

April 15th is so ingrained in our thinking as Tax Day that it’s easy to forget that the tax for the previous year is owed on the first day of the next tax year.  Payment isn’t due til April 15th, but the obligation exists before the return and payment are due. Why is this important […]