What New Bankruptcy Lawyers Need To Know: Beyond The Code

The Electronic Shortcut To Perdition

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Didn't someone wise say that the road to hell is paved with good intentions? So, my subject today is the need to have the client's actual signature on each document filed with the court. It should be obvious and go without saying. Yet the point apparently needs to be made. The observations of colleagues in the trenches suggest that newcomers and those seduced by the electronic ease of ECF … [Continue reading...]

Pick Bankruptcy, Take Care of The Tax

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The rule that Uncle Sam comes first, in bankruptcy, can be a life saver, even if the debtor is going to lose everything in the process. I was brainstorming with a colleague about his client who was about to suffer a huge judgment in state court. There were virtually no other creditors that made bankruptcy otherwise appropriate and the judgment might well be non dischargeable. There was a … [Continue reading...]

Five Reasons To Break Up Couples

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Consider that your job as a bankruptcy attorney may be to separate married couples. Huh, you say? Doesn't the traditional wedding ceremony include the charge that "what God has joined together, let no man put asunder"? (I'll let you know more when I've Googled "asunder"). But I suggest that although the code permits married couples to file bankruptcy together, it certainly does not require … [Continue reading...]

Are You Throwing Your Bankruptcy Client To The Predators?

By Cathy Moran, Esq. Filed Under: Tax

Behind every IRS tax audit lurks the state taxing authority. Fail to give the state its due, and the tax in question may be non dischargeable. I had to dredge this tidbit from memory last week when we were looking over the tax transcript for a client who had been audited by the IRS and assessed a whopping tax bill. To his good fortune, that newly assessed tax will be … [Continue reading...]

The Bankruptcy Thigh Bone Is Connected To The Hip Bone

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The entire mass of information in the bankruptcy schedules is interconnected in ways our clients don't always perceive. However, if they don't get the interconnection, they may get a rude surprise. I have a list of Do's and Don'ts that I give clients at the conclusion of our initial consultation. Got more evidence this week that they don't read it and, even if they read, they don't think or … [Continue reading...]

What To Say When You Have No Answer

By Cathy Moran, Esq. Filed Under: Start Here

What do you do when you don't know the answer to a bankruptcy client's questions? After all, you're a bankruptcy lawyer. Divorce lawyer Lee Rosen lists six sound responses to the question you can't answer off the top of your head. His favorite is "I don't know, but I'll get back to you". I find myself saying, "let me think about it". Another response, which I wish I'd adopted earlier … [Continue reading...]

Think Beyond The Means Test

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

It started as a means test question: could emergency medical expenses be deemed non consumer debt. It ended up as a step back to get the bigger picture. Well seasoned bankruptcy counsel brought the fact pattern to a list serve of colleagues. The prospective debtors' income in a small consulting corporation is declining, his health crisis raises not only income … [Continue reading...]

Bankruptcy Cases And Making Change Happen

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The axiom that the only thing constant is change certainly applies in the practice of bankruptcy law. Our client' s life changes and we're looking to dismiss a case or convert a case to another chapter. The code deals with this. Section 348 addresses the effect of conversion; 349 follows with the effect of dismissal. These sections provide the "what happens" when a case converts or is … [Continue reading...]

Know the Rules of Debt, Divorce & Discharge

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

Today let's combine the themes of my last two posts here and talk about the obligation of a spouse to indemnify the other spouse in a divorce from the debts assigned to the spouse. The indemnity obligation is not one most lay people see as a "debt". It doesn't involve paying money to the ex, no statement is sent, the ex probably doesn't call if the payment is late. If you hand the client … [Continue reading...]

Are You Playing Chapter 7 With A Full Deck Of Cards?

By Cathy Moran, Esq. Filed Under: Before filing

If unscheduled assets are discovered by the trustee, can you dismiss a Chapter 7 case? The question came from the audience of my presentation to bankruptcy lawyers on techniques for the initial interview with the client. It boiled down to: what are the consequences for not doing a skillful job of extracting the whole story from the client. Getting out of Chapter 7 The consequences, in … [Continue reading...]

Bankruptcy & Divorce: Property Settlements

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

One change brought by BAPCPA made the choice of chapter in bankruptcy much clearer: the amendment of §523(a)(15). Read with §523(a)(5), now all debts to a spouse, former spouse or a child, incurred in connection with a divorce or separation are non dischargeable in Chapter 7. There's no longer a balancing-of-the-hardships test for discharge of non support obligations between spouses. The … [Continue reading...]

Beware The Trustee Carrying Tax Losses

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

A tax loss carryforward in the hands of a bankruptcy trustee can have results as distressing as crayons in the hands of an unsupervised toddler. Identify the debtor's tax attributes before you do your liquidation analysis. Whether you are selecting a chapter for a client, working exemption issues, or calculating what a Chapter 13 plan has to pay, you are analyzing whether there is non exempt … [Continue reading...]

Bankruptcy’s Short Tax Year: Gem Hidden In Plain Sight

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Tax

Double your tax returns, double your fun? Well, maybe taxes aren't fun, but they are inevitable. Mastering the gem of the short tax year can mark you as a bankruptcy lawyer who really knows his stuff. The option of selecting a short tax year in bankruptcy is too little understood and too seldom used. This must stop, I say<g>. Short tax year explained Probably stripped of … [Continue reading...]

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