What New Bankruptcy Lawyers Need To Know: Beyond The Code

A Tax Reminder for Chapter 13 Debtors

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Don't let your client forget to look at the Chapter 13 trustee's disbursements in the case for income tax deductions. Mortgage interest, property taxes, business expenses and state income tax payments all may lurk in the trustee's record of disbursements for 2010. Those payments are made with the debtor's money, and it seems therefore to me, at least, that the debtor should be able to deduct … [Continue reading...]

10 Clues in The Debtor’s Tax Return

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Vital information lurks in the debtor's tax return. Are you flushing that information out and incorporating those nuggets in the petition, or are you content to wait for the trustee to confront your client in public at the 341 meeting with the inconsistency? Ten things you might find in the return: Dependents- how does the list of tax dependents compare to the current household size Wage … [Continue reading...]

Don’t Take The Client At His Word

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Given all the energy bankruptcy lawyers spend extracting information from clients, it's discordant to point to a situation where you, as the bankruptcy lawyer, should blow past the client's input. But here's the situation where that is true: Don't list the debtor's interest in a decedent's estate without further inquiry. Ask the client if they are an heir or have an interest in an estate, and … [Continue reading...]

Get Exemption Claims Under The Limit

By Cathy Moran, Esq. Filed Under: Exemptions

The rookie bankruptcy lawyer was clearly proficient at math, but forgot the bankruptcy administration end game: money for creditors. The client owned two assets with apparent equity and the available grubstake did not cover both. The attorney had calculated the equity in the home thus: (Fair market value) less (mortgage balance) less (exemption) = equity The equity, on his … [Continue reading...]

How To Enforce The Discharge Injunction

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Every once in a while, courts tell us explicitly how to do things. The 9th Circuit took its turn when it laid out how to get a violation of the debtor's discharge before the court. The narrow issue in Barrientos v. Wells Fargo, 09-55810,was whether the action against a creditor with a discharged debt should be brought as an adversary or as a motion. The 9th voted for a motion , reasoning … [Continue reading...]

What The Bankruptcy Trustee Hopes You Forget

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Remember the float? Your client's check book balance may not be the funds on hand when the bankruptcy case is filed. Too often the client whips out his checkbook to tell what's on deposit when we gather to sign the bankruptcy petition. The client has already deducted, at least mentally, the recent checks he's written. But call the bank, and you may get a far larger number if … [Continue reading...]

2010 Tax Return Imperative in Chapter 13

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Got to file the 2010 tax return to get your Chapter 13 plan confirmed is my message to clients filing bankruptcy. But it isn't due til April 15th and I usually get an extension, comes the reply. Not this year. A case filed at any point in 2011 includes tax liability for 2010, since the tax is due as of the close of the tax year. A Chapter 13 plan has to pay priority claims in full. How … [Continue reading...]

Find The Avoidable Transfers Before Trustee Does

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Remember "Where's Waldo"? As a bankruptcy lawyer, can you pick the transfer out of the crowd? Transfer is a defined term in the bankruptcy code. Both lawyers and clients understand a sale or a gift as a transfer. But do you recognize the grant of a security interest as a transfer? I conferred in a case recently where six months before the bankruptcy filing, a business lawyer had drafted … [Continue reading...]

Roadmap To Car Value

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

When the judge's response to a dispute about a vehicle's value is to hold an evidentiary hearing, you're on stage. Do you feel like the deer in headlights ? What evidence is available? Admissible? How to get it in? The newest judge in San Jose has just written an opinion that can serve as GPS to get you where you want to be, along with some commentary on what he would have liked to … [Continue reading...]

The Best MCLE Hour Ever

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

I've been admitted to the bar in California for 33 years and for most of that time we've had a continuing education requirement of some 15 hours a year. I've handily exceeded that minimum every year. When I was new and a generalist, there was so much to learn; when I specialized, I found depths of bankruptcy practice that I had not imagined. So when one program sticks out against that … [Continue reading...]

Use The Real Tax Due Date For Means Test

By Cathy Moran, Esq. Filed Under: Means test

Californians: did you know property taxes were due earlier this week? Huh? you say. Property taxes are due in April and December. Wrong. Property taxes are due February 1st and November 1st. They are delinquent if not paid by April 10th and December 10th. Interesting, you say. But what's the implication for bankruptcy's means test? It means that in cases … [Continue reading...]

Differing Dollars In Chapter 13 Plan vs. Claim

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Who wins when the mortgage arrearages in the Chapter 13 plan are less than the filed proof of claim? I have to admit that this has puzzled me for years, and the approaches of the three Chapter 13 trustees I practice before are different and without a an articulated theoretic basis. So I embraced a case recently featured at ConsiderChapter13.org: Euliano, a bankruptcy decision by Judge … [Continue reading...]

On The Trail of The Involuntary Lien

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

If you just ask the client for a bill from each creditor, you stand to miss tax and judgment lien creditors who don't send a monthly bill. Schedule D of the bankruptcy schedules should call out each entity with a secured claim on the debtor's assets. Car lenders and mortgage companies are at the forefront of our clients' minds and are seldom missed. But a bankruptcy lawyer often has to dig … [Continue reading...]

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