What New Bankruptcy Lawyers Need To Know: Beyond The Code

The $1000 Word

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Word choice in a fee application cost a Chapter 13 lawyer $1000 yesterday. We all know about forbidden words; most of us even know some. Would you have guessed that "prepare" was one of them? I was waiting my turn in court, on a fee app no less, when the fee application of a well established firm came up. The judge read off a time entry: "Prepare debtor's budget - 3 hours". "Debtors … [Continue reading...]

Beware The Taxes That Follow Foreclosure

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Who cares about stopping the foreclosure, it's stopping the tax that results from foreclosure. It's a brand new perspective for me as I counsel families with homes at risk of foreclosure. Given mortgage debt that exceeds today's value of the property, a foreclosure will result in a 1099 for the difference between the loan balance and the current market value of the property, as selected by the … [Continue reading...]

The Real Truth About Bankruptcy Lawyers & Clients

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

We live in two different worlds, the client and the bankruptcy attorney. "Creditors", for debtors, means those folks who send a monthly bill, and who call if you are late. "Creditors", for bankruptcy lawyers, means everyone who has a claim of any kind against the client. In his Fundamentals of Bankruptcy Practice for newcomers last night, the new Chief Judge of the Northern … [Continue reading...]

End Run On Chapter 7 Trustee

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

I found one more reason to file 13 when there MAY be non exempt equity. I tout Chapter 13 as the better choice when there are issues of insider preferences, transfers that might be found constructively fraudulent, or where there are small amounts of equity in assets. It's better, I think, that the debtor propose a plan and shape the facts to present the debtor-friendly characterization of an … [Continue reading...]

The Price Is Not Right

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Value, like beauty, is in the eye of the beholder. The value of the debtor's stuff is colored by their ownership. Get a truer value by asking the client to imagine buying a replacement, just like the one he owns now. Clients cling to old or comfortable ideas of what their personal property is worth. Time after time these days, clients will give me the blue book value for a gas … [Continue reading...]

Automate Yourself Straight To Bankruptcy Malpractice

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The debtor's attorney had him input the schedules through a subscription "bankruptcy interview" website, printed them out in his office and had the debtor sign them, apparently without change. The client got all the downside of self representation but with the cost of a bankruptcy lawyer. The trustee got apoplexy. I got a consult with the now-imperiled non filing spouse. The trustee and I … [Continue reading...]

4 Ways To Know If You’ve Got A Bankruptcy Preference Problem

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

When should the debtor care about preferences? When it was family or they are filing Chapter 13, is my short answer. Everybody, debtors and lawyers, seem to know that there is something important about transfers made within 90 days of the commencement of the case. There seems to be lots of confusion about what that importance is. Debtors think that making a preferential … [Continue reading...]

How Much Of Your Client Are You Exposing?

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Do you meekly send your client's tax return to creditors at their request? Two different authorities suggest it isn't necessary. One of the stick-it-to-the-debtor provisions of BAPCPA is the mandate that the debtor provide a copy of his tax return to any creditor who requests it. 11 USC 521(e)(2). [I wonder that the reform law didn't also require the debtor to strip naked at the 341.] Consider … [Continue reading...]

Here’s How To Charge More For A “Simple” Bankruptcy Case

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Client buy- in and time records saved a Florida bankruptcy attorney from disgorging fees twice the local average for a no asset Chapter 7. How? Marilyn J. Hochman is the poster child for the benefit in keeping meticulous time records when you're representing consumer debtors. Even though you're likely working on a flat-fee agreement, the need to justify the value of your services is of … [Continue reading...]

Why A Successful Fee Application Needs A Story

By Cathy Moran, Esq. Filed Under: Attorneys fees

Newly appointed to the bench, the young judge considering a calendar of fee applications complained to the assembled lawyers. "Before I became a judge, you used to tell me the greatest client stories in the hall. How come those stories are missing from your fee apps?" That wistful question was voiced now well more than 20 years ago, but her comments still resonate in my head. A fee … [Continue reading...]

Perils Of The Courtroom

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The judge approved my fee application for another $8,000 in a Chapter 13 that was never confirmed, but ambushed me on the statutory rules of conversion. It wasn't the fight I had prepared to make over getting paid. My fee application was an inch thick; it sliced and diced the work I had done before the debtor conceded that self employment in the real estate world would not allow him to keep … [Continue reading...]

When It Doesn’t Add Up

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

It wasn't a week after my friend Fredrick's presentation on due diligence for bankruptcy lawyers that the need for one of his tricks emerged. There seems to be an ethereal convergence about such things. The client hadn't revealed to the young lawyer bonuses that he had received in the means test look back period. The lawyer had a paystub for every period in the six months, but still missed this … [Continue reading...]

Five Steps To Due Diligence

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Our professional well being and the successful outcome of the client's case may well depend on how well we, as attorneys, have done our due diligence. "I asked the client", you say. Perhaps not good enough, say the cases. Well done bankruptcy schedules require a substantial amount of information, much of it interrelated. Part of the strategy of the drafters of BAPCPA was to scare off debtors … [Continue reading...]

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