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Debt Relief Agent
Recently the U.S. District Court in Connecticut ruled that parts of the revised Bankruptcy Code were unenforceable. (See “Federal Court Strikes Down Bankruptcy Code Provisions“) But some parts of the case remain undecided. While the Court decided that attorneys not engaged in the practice of bankruptcy law did not have to comply with [...]
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In a consumer bankruptcy case, sometimes the trustee will request, or even demand, that the debtor amend the schedules based upon the trustee’s opinion that something has been omitted, or that something is incorrect.
Usually, the trustee is right and the debtor makes the amendment. After all, the bankruptcy schedules are complicated and contain a great deal of [...]
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Divorce attorneys like to insert language in the divorce agreements or decrees reciting that certain obligations are not dischargeable in a subsequent bankruptcy case by one of the ex-spouses. Now there may be differing opinions on what parts of a divorce decree are or are not dischargeable in a bankruptcy, but such language does not [...]
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Federal Debt Relief Agent
After waiting more than two years for a decision, U.S. District Judge Droney of Connecticut ruled on September 9, 2008 that attorneys must be free to advise clients regarding their finances free from governmental interference. In a further move, the judge also agreed that certain of the Bankruptcy Code provisions enacted in [...]
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The Means Test is not a pretty part of the new bankruptcy filing requirements. Above Median Income filers need to compare their income and expenses against allowances based on the Internal Revenue guidelines for delinquent taxpayers. The new statute is not particularly clear on a number of issues, including two which concern the form’s three [...]
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The client came in to address just his overwhelming credit card debt and left prepared to restructure his business and relocate to his retirement home. Bankruptcy became an opportunity to address all of the client’s financial commitments and square them with his mid range plans for his life. Pretty neat!
Because a debtor must list all [...]
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Another example of one of the absurd results of the Means Test is seen in the calculation of CMI for school teachers which can show that a teacher’s yearly income up to 33% higher than it really is.
In North Carolina, many school teachers are often paid for only 9 or 10 months [...]
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With the passage of the new bankruptcy laws in October, 2005, all debtors must now calculate current monthly income, which is a legal term of art under the new Bankruptcy Code. In a nutshell, current monthly income is the average monthly income for the previous 6 months preceding the Bankruptcy Filing Date. For w-2 employees, [...]
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Post-filing earnings, minus reasonable living expenses, in Chapter 13 is property belonging to the creditors. This can include tax refunds.
I used to counsel my clients to decrease their withholdings, which increases net pay and reduces the tax refund. I came to realize that, by and large, my clients needed the forced savings which a tax [...]
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Effective September 10, 2008, are the new Chapter 7 Trustee Guidelines for the Southern District of California Bankruptcy Court. While not mandatory, failing to follow these guidelines will almost always result in having the case called at the end of the 341 Calendar, and hearing continuations.
These guidelines provide a comprehensive list of documents that are [...]
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The time to challenge a debtor’s chapter 7 discharge for abuse is counted from the date of the first meeting of creditors, the Kansas District Court ruled on appeal. See In re Close, Case No. 07-2076-JAR, Bankruptcy case No. 06-20195-7, Turner UST v Close, (2008).
Judge Julie A. Robinson said the U.S. Trustee was too late when it [...]
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Okay, the debtor in a bankruptcy case can’t really fire the chapter 7 trustee, even if the trustee is annoying or is engaging in troublesome litigation with the debtor. After all, the reason the court appointed the chapter 7 trustee is to maximize, within the limits of the law, the return of money from the [...]
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When you file a Chapter 7 bankruptcy, all of your assets become “property of the estate.” That means that control over those things passes to the trustee assigned to your bankruptcy. Basically, the purpose of this rule is to allow the trustee to administer the property and sell anything worth more than your exemptions to [...]
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New York bankruptcy lawyers know that our bankruptcy trustees never have to deal with the headache of a bounced check. Why?
Because our Chapter 13 trustees accept only money orders or certified funds for Chapter 13 Plan payments.
Chapter 13 trustees in other parts of the country are accustomed to automatic wage deductions, and yet others allow [...]
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In most bankruptcy courts a Chapter 13 debtor is not allowed to borrow money without the court’s permission, based either on a court order or local rule. This tradition has existed in most places for as long as anyone can remember. Why?
It may come as a surprise to most people but the Bankruptcy Code does [...]
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Remaining current on your mortgage payment after you file Chapter 13 is a requirement of your Chapter 13 confirmation order. In many areas of the country your ongoing mortgage payments must be made through the Chapter 13 Trustee. In the Northern District of New York courts, you generally make your mortgage payments directly to the [...]
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Save Wall Street . . . Forget Main Street. That is basically what Republicans and Democrats are doing this week as they decide to provide the biggest bailout in he history of the world.
The problem with this economy started with the housing crisis and continues to be the housing crisis. In July, 2007, I wrote [...]
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Sometimes people forget that life in general still continues while you are in bankruptcy. This includes the fact that you must file your tax returns on time just like any other year. I am sure you have heard the phrase, there is nothing certain but death and taxes.
Do you have to file your [...]
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When you propose a Chapter 13 plan for three or five years, your intent is to comply with the terms of the plan. Three or five years can be a long time, though, and often there are changes that you did not anticipate. One of the benefits about Chapter 13 is its flexiblity which can often accommodate the [...]
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As a constituent and bankruptcy attorney working to help families in our community save their home from foreclosure, I urge you to include court-supervised mortgage restructuring for financially distressed American homeowners in any package you approve to bail out Wall Street. Why do I support this approach?
The rapid deterioration of the financial sector has been [...]
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When a check bounces, making good on it is normally just paying off a debt owed. If that happens during the 90-days before a bankruptcy is filed, it would be an avoidable preference. But if a lender plays its cards right, it may be able to protect itself after all.
In the normal scenario of [...]
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You are allowed to sell your home while you are in a Chapter 13. Be sure to contact your attorney and let him know what you want to do. You will be required to submit a signed Contract of Sale. Your attorney will then file a Motion to Sell with the court and put [...]
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Sometimes when you are in a Chapter 13 you learn that you are going to get some extra, out of the ordinary money. Sometimes it is from a bonus at work, or a lump sum settlement on a Social Security Disability or Workers Compensation case. Or it could be an inheritance or a personal injury [...]
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As an American Citizen and a Bankruptcy Attorney, I am torn on the bailout issue.
As am American Citizen, I am outraged that our Government let this happen and did nothing for the last year and a half, and now they are making the case of global disaster if something isn’t done immediately.
As a Bankruptcy Attorney, [...]
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The Americans with Disabilities Act (ADA), 28 U.S.C. sections 12181 - 12183, the federal regulations implementing the ADA, 36 C.F.R. 36.104 et seq., and the U.S. Department of Justice regulations relating to lawyers and the ADA, 56 Fed.Reg. 35567, address a lawyer’s obligation to provide a sign language interpreter for a deaf client at the [...]
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Each year that you are in a Chapter 13 bankruptcy you are required to turn in a copy of your income tax return to your Trustee. Whether you must turn over the return to the Chapter 13 Trustee depends on your Trustee.
In the Northern District of New York in the Utica and Syracuse [...]
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This week our firm had oral arguments in an appeal of first impression in the Ninth Circuit Bankruptcy Appellate Panel. The appeal concerns whether other federal laws may be used in the bankruptcy claims process, or whether the Bankruptcy Code offers the sole remedy. In a few months, a decision should be out.
In the appeal [...]
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In Part 2 of Chapter 11 Bankruptcy Basics, I talked about some of the basics of Chapter 11 Plans and what a Chapter 11 can do and not do. This series concludes with a discussion of fees and choosing a good Chapter 11 lawyer.
Is Chapter 11 expensive? Yes. Fees vary tremendously from area to area, [...]
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The attorney-client privilege is a rule of evidence which prevents a client from being forced to reveal the content of confidential communications with his or her attorney. The scope of this evidentiary rule is normally determined by common law, and it varies from state to state, and from district to district in federal court cases, [...]
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In Part 1 of Chapter 11 Bankruptcy Basics, I answered some of the basic questions about what a Chapter 11 is. This series continues with a discussion of some of the things that a Chapter 11 can do.
Why would I want to file Chapter 11? Generally speaking, my Chapter 11 clients fall into three categories. [...]
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In recent years, more and more individuals and businesses are filing for relief under Chapter 11 of the Bankruptcy Code. This blog (and the ones that follow) will answer some basic questions and provide information about Chapter 11.
What is Chapter 11? Can’t get more basic than this! A Chapter 11 is simply a bankruptcy case [...]
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Sections 707(b)(4)(C) and 707(b)(4)(D) of the bankruptcy code, as amended by the 2005 Bankruptcy Reform Act, provide as follows:
(C) The signature of an attorney on a petition, pleading, or written motion shall constitute a certification that the attorney has–
(i) performed a reasonable investigation into the circumstances that gave rise to the petition, pleading, or written [...]
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ALERT! It has been reported that some Chapter 13 debtors have received letters from the “Chapter 13 Trustee” telling them to sign over their home to the Trustee and to call an 1-800 number. If you have received this letter, it is a scam being pulled on unsuspecting Chapter 13 debtors.
IF YOU ARE IN [...]
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Money Magazine has been following the situation of Jeffrey Yarbrough, a Texas restauranteur who filed Chapter 13 after his three Dallas restaurants went under.
The most recent article, published September 17, 2008, takes a look at how Mr. Yarbrough has done recently.
Explaining why he allowed Money to make his story public, he said, “I opened up [...]
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Last summer, the Florida legislature added a new $4000 wildcard exemption for each Florida resident who does not receive the benefit of a homestead exemption. Previously, Judge Paskay decided that the new exemption was stackable with the existing $1,000 personal property exemption. Now, we have two new court rulings in the Middle District of Florida [...]
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When I first started practicing bankruptcy law some 20 years ago, one of the lawyers who mentored me regularly reassured me that bankruptcy was a pleasant area of practice because “nothing happens very quickly and you can always amend your pleadings if you change your mind.”
I have generally found this reassurance to be true, although [...]
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“Tougher Bankruptcy Laws Bite the Lenders.” This is the title of a recent article in Business Week. As I previously noted in my article, “BAPCPA and the Rule of Unintended Consequences,” Congress’ adoption of BAPCPA—the mean-spirited, poorly drafted and creditor-written bankruptcy changes that took effect in 2005—has had a number of consequences, not all of [...]
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This afternoon, I was running errands and I turned on the radio and caught a few minutes of the well known radio show “Handel on the Law.” The host, Bill Handel, brings a high energy and fast pace to his show, and he covers a wide variety of legal topics.
In today’s show, a listener called [...]
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The answer in almost every case is No! To start, in Chapter 13, assets are never taken and liquidated. Instead, most Chapter 13 Plans are funded from earnings, and your retirement plan would be used to fund the same only if you so voluntarily chose.
In Chapter 7, retirement accounts are likewise generally never taken since [...]
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ASSETS: Your property, things that you own or have a legal interest in that have value. Your house, car, bank accounts, cash, household goods and furnishings, are all considered assets, even if you are making payments on them.
If you liked that post, then try these...Should I pay off my Chapter Plan early? by Pamela Stewart, [...]
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An academic paper by U.C. Davis’s Ning Zhu analyzed the composition of debt compared to income levels among those who filed bankruptcy in Delaware in 2003. Unfortunately, after all the legislative hoopla in the bankruptcy world, it doesn’t study whether the vaunted 2005 “reforms” to bankruptcy law made any meaningful difference in the incidence of [...]
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ARREARAGES: What you’re behind on in making payments. If your monthly payment is $500, and you’re three payments behind, your arrearages are $1,500.
If you liked that post, then try these...Surrendering a California Home in Bankruptcy. How Much Time? Part 1 of 2. by Michael G. Doan, San Diego Bankruptcy AttorneyCan I Lose My Tax [...]
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The Senate Judiciary Committee voted to pass S. 3197, the National Guard and Reservists Debt Relief Act, which will help protect debtors who are on active military duty or performing homeland defense. The National Association of Consumer Bankruptcy Attorneys legislative committee ,and NACBA Board member and Durham North Carolina Bankruptcy Attorney, Ed Boltz, helped with [...]
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Distressed homeowners are sometimes approached by real estate agents who tout the idea of doing a “short sale” of the real estate. A short sale is one in which the sale price is insufficient to completely pay off the balance owed on one or more of the mortgages upon the property.
Normally, a lender will not [...]
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I often think how much better things would be if I could be in charge. Trust me, you’d be better off, too. I realize that is approximately as likely as monkeys flying out…well, you know. But as the third anniversary of BAPCPA approaches, and with a lot of really great ideas from [...]
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Under 28 U.S.C. section 1452, a bankruptcy debtor may remove an action from any other court to the bankruptcy court, simply by filing a notice of removal with both the original court and the bankruptcy court in which the debtor’s bankruptcy case is pending. The action can be removed to the bankruptcy court by either a [...]
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ADVERSARY PROCEEDING: A lawsuit filed in the bankruptcy court which is related to the debtor’s bankruptcy case. Examples are complaints to determine dischargeability and complaints to determine the extent and validity of liens.
If you liked that post, then try these...What does feasibility of a Chapter 13 plan mean? by Pamela Stewart, Attorney at LawSuing the [...]
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A debtor guilty of fraud is denied a discharge in bankruptcy. Section 523(a)(2)(A) excepts from discharge a debt “for money, property, services, or an extension, renewal or refinancing of credit, to the extent obtained by—(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.”
The [...]
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Among the hardest hit in these difficult economic times are senior citizens. Statistics show, according to the Sacramento Bee, that although bankruptcy filings have almost doubled since the early 1990’s, the worst hit were seniors. For those between the ages of 65 and 74, filings went up over 125%. But for people over 75, from [...]
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The denial of a Chapter 7 discharge under Section 727 is sometimes referred to as the “bankruptcy death sentence.” One way to cope after being denied a Chapter 7 discharge or having specific debts held nondischargeable was to try a Chapter 13. However, after the 2005 BAPCPA amendments, the scope of the Chapter [...]
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New median income figures for bankruptcy means testing were adopted today by the Executive Office of the U.S. Trustee as expected. The new guidelines apply to consumer bankruptcy cases filed starting October 1, 2008.
Read more about the bankruptcy means test. Past income is the correct measure of chapter 13 payments according to the 9th Circuit [...]
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I haven’t received the check yet, but, I can say that I recently settled an Adversary Proceeding with National City Bank. The quick settlement terms are that National City Bank will dismiss its four count dischargeability complaint seeking re-payment of $307,198.90 and pay attorney’s fees to counsel for the Debtor (me) for defending the matter, without the [...]
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Inflated claims filed by mortgage servicers is a frequent complaint of Chapter 13 debtors and their attorneys. In response, the Mortgage Committee of the National Association of Chapter Thirteen Trustees (NACTT) recently released a “Best Practices” guideline for trustees and mortgage servicers.
The document has no legal authority, but it is a guideline that is viewed [...]
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In the recent case of Milavetz, Gallop & Milavetz, P.A. v. United States, the Eighth Circuit Court of Appeals struck down a major provision under the new Bankruptcy Reform Laws which prevented attorneys from providing certain legal advice to debtors contemplating Bankruptcy. Specifically, the Court held that “attorneys who provide bankruptcy assistance to assisted persons are debt relief agencies under the Bankruptcy Code, and [...]
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The unemployment figures for August 2008 were released this week, reaching an unexpected 6.1%. As a result, the Misery Index is likely to go even higher. The Misery Index is a measure of the rate of inflation and the unemployment rates. The rate attempts to show the pressures placed on consumers in the United States.
The [...]
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The IRS considers debt that is cancelled, in full or in part, to be taxable income to the debtor to the extent the financial position of the taxpayer has been improved by the debt cancellation. This means that a credit card company settlement can result in an income tax bill from the Internal Revenue Service. It [...]
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On September 4, 2008, the U.S. Court of Appeals, Eighth Circuit, issued its ruling in the Milavetz v. United States case, No. 07-2405. The appeals court upheld the 2005 Bankruptcy Reform Act’s requirement that attorneys identify themselves as “debt relief agencies,” but struck down the prohibition on attorneys advising clients to incur more debt in [...]
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Most legal professionals are of the opinion that a chapter 13 mortgage lien strip should not be effective until discharge or plan completion. They take this position, even though there is no such authority for the same anywhere in the code.
The better position, is that lien strips of wholly unsecured mortgages should take place immediately. [...]
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In my previous blog, I had written about how a San Diego Bankruptcy Court ruled last week that a Chapter 13 plan could not be used to bind a 506 value on a creditor unless it was 1) “clearly and conspicuously stated in the plan,” and 2) the creditor is served in the same manner as lawsuits [...]
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The AARP has a new campaign on TV and the Internet about the high number of bankruptcies caused by medical bills. This is contrary to the position in the study that Andy Miofsky spoke of in his article Is Bankruptcy Reform Around the Corner? That study links high debt to bankruptcy. [...]
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Kansas has four conflict decisions among the many decisions written on the propriety of taking the car ownership allowance on the means test if your car is paid for and has no lien upon it. Last week, one Kansas judge reversed herself to follow a BAP opinion.
The Bankruptcy Appellate Panel for the U.S. Circuit [...]
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On August 25, 2008, Judge Adler in the Southern District of Southern California Bankruptcy Court issued a published decision on lien stripping in a chapter 13 case, In re Pereira, 08-03059. In that decision, without authority or direction to any Bankruptcy Code provisions, the Court held that confirmation can not take place until after after [...]
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An earlier post discussed what would happen if a debtor’s income increased significantly. Quite frankly, that just doesn’t happen to most of my clients….they usually have decreased income due to lay-off, unemployment, illness, divorce, or a death of the family wage-earner.
Does this mean the Chapter 13 Plan which was carefully set up calculating all income [...]
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Get ready for a political tussle, the winds of bankruptcy reform are blowing. Jim Wasserman over at sacbee.com profiles a study that blames overspending as the leading cause of bankruptcy. The report was written by associate professor of management Ning Zhu from UC Davis, Graduate School of Management. Zhu claims debt caused over half of [...]