What New Bankruptcy Lawyers Need To Know: Beyond The Code

Voluntary Retirement Contributions Not Disposable Income in the 9th

By Cathy Moran, Esq. Leave a Comment Filed Under: Chapter 13, Means test

Contributions to an employer-sponsored retirement plan going forward are excluded from disposable income in Chapter 13, says the 9th Circuit in Saldana, 122 F.4th 333, 19 years after BAPCPA became law. What took so long? Words in the statute matter Congress, in its BAPCPA-typical awkward fashion, said right there, in 541(b)(7)'s hanging paragraph, that amounts withheld for voluntary contributions to a qualified retirement plan "shall not constitute disposable income as defined in section 1325(b)(2)..." Now, we can ponder why issues of disposable income are hanging around in the definition of property of the estate, when those contributions in the hands of the retirment plan are already excluded from the estate, but the "why" is less important than the words of the statute. Nonetheless, in 2012 the 9th Cir. BAP in Parks focused on the placement of the hanging paragraph in 541 to conclude that it applied only to prepetition contributions to a retirement plan. The Parks … [Continue reading...]

2026 Brings Larger California Homestead

By Cathy Moran, Esq. Leave a Comment Filed Under: Bankruptcy Practice, Real property

It’s time to check out the California homestead numbers for 2026. The 2021 expanded California homestead not only brought the exemption amount closer to the real cost of housing, it provided for annual adjustments for inflation. The original legislation created a $300,000 floor on the exemption and a $600,000 cap for homeowners, based on the median price of a home in the … [Continue reading...]

Putting the spotlight on Chapter 13

By Cathy Moran, Esq. Filed Under: business of law

My fellow author at ConsiderChapter13.org Jen Lee called for the bankruptcy bar to do a better job of pitching the manifest strengths of Chapter 13. Ditch the jargon and focus on the facts that are Chapter 13's strenght. Her advice to use head to head comparisons with alternative approaches to debt for the client is right on. Use stories that are relatable and the dollars and cents … [Continue reading...]

BOLO Alert: Community Property in Unexpected Places

By Cathy Moran, Esq. Filed Under: Community property

In law enforcement, BOLO stands for Be On the Look Out. But even outside of law enforcement, BOLO alerts operate. In this case, we as bankruptcy lawyers need to be on the look out for community property. It's easy to think that community property is an issue only for practitioners in the 9 community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, … [Continue reading...]

The Trick To Getting Paid For All Your Work In Chapter 13

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Tired of eating fees at the end of a Chapter 13 when the debtor-client gets a discharge and you get a write off of the unpaid fees? The problem- attorneys fees incurred during the case but unpaid at case end are uncollectible when the debtor gets a discharge. It happens all too frequently when you have cases with multiple complexities or cases with lots of work after the last payment is … [Continue reading...]

Use your authentic voice to humanize yourself and the law

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The legal chatter is full of the promise of Artificial Intelligence to revolutionize the practice of law. It can write your letters, your briefs and your website, they say. But there's a catch here (other than the fact that AI sometimes makes stuff up, including case law, out of whole cloth.): ChatGPT and its ilk write without nuance, warmth, or texture. Those of us in consumer-facing … [Continue reading...]

My Client Communication Strategy: Flood the Zone

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Poor client communication is the source of both client anguish and discontent with the legal profession. Case in point: failure to return calls is the most frequent complaint to the state bar where I practice. As bankruptcy lawyers, we're dealing with people under stress: they are seldom at their best and their capacity to absorb the intricacies of bankruptcy is often limited. Still we need … [Continue reading...]

What I Learned About Bankruptcy on Facebook

By Cathy Moran, Esq. Filed Under: Opinionated

For nearly a year, I’ve been hanging out on a Facebook “bankruptcy support” group. It’s a world full of misunderstanding, fear, and anguish. But it’s also clear to me that our profession can learn some things from that stew, both individually and collectively. Represented, sorta The thing that glares at me is the number of posters who are represented by attorneys, yethave little or no … [Continue reading...]

Still Crazy After All These Years

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

More than four decades after the Bankruptcy Code was enacted, we are still tripping over the lingering conundrums of Chapter 13. Four decades, and appeals courts haven't brought clarity and predictability to what should be a simple, well understood process for individuals to reorganize their financial lives. I speak of course about the mysteries of property of the estate, vesting, and plan … [Continue reading...]

How to Wring Out Every Last Means Test Deduction

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Every extra dollar deduction you can wring out on bankruptcy's means test is important. A dollar doesn't sound like a lot, but an extra dollar less in DMI saves a Chapter 13 debtor $60 over the life of a 60 month plan. Every $100 saves $6000. You get the picture. Besides lowering the cost of the case to the debtor, a lower bottom line brings the DMI calculation into better alignment with … [Continue reading...]

Don’t Dismiss FRBP 7041

By Cathy Moran, Esq. Filed Under: lawyer skills

Quick: tell me all you know about FRBP 7041. Hint: it involves voluntary dismissals Maybe you're like me and never gave it much thought. My encounter with the rule ended up at the 9th Circuit, so I now know a lot more about how it impacts bankruptcy motion practice. I concluded that the "Withdraw" event on ECF enabled a trap for the unwary counsel and court. Here's the rule FRBP 7041 … [Continue reading...]

Navigate The Marital Debt Thicket In Bankruptcy

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Family Law in Bankruptcy

Love and Marriage. Fries and Catsup. Chips and Dip. Like these famous pairings, divorce and bankruptcy are frequent companions. When a couple goes their separate ways, often the most substantial marital accumulation is debt. The questions we get as bankruptcy practitioners usually revolve around whether to file a bankruptcy case before or after the divorce. The sound answer … [Continue reading...]

Bankruptcy and the “hard of hearing”

By Cathy Moran, Esq. Filed Under: Before filing, Counseling clients

You never know just how a client hears your advice, until you hear yourself quoted back to yourself as the reason for a client doing something stupid. In my case, I’m unclear about whether the message received was really as reported, but it’s made me think about my choice of words. I was asked in the initial consultation if gifts of money from the debtor’s parents in … [Continue reading...]