What New Bankruptcy Lawyers Need To Know: Beyond The Code

Meet Me in Puerto Rico

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Dateline: San Francisco International Airport I'm leaving on a jet plane, to coin a phrase<g>, for NACBA's Fall Workshop in Puerto Rico. Nothing that all day on a plane can't accomplish. If you're attending, please look me up and introduce yourself. I'd love to have faces attached to names, in the ever optimistic thought that I can remember them. Any feedback you can offer on … [Continue reading...]

Twelve Ways to Tweak Schedule J

By Cathy Moran, Esq. Filed Under: Before filing

When the debtor's Schedules J shows a significant number on the bottom line, that "excess income" may suggest the case is an abuse. The first question should always be: "How real are the projected Schedule J expenses"? In districts where the difference between I and J retains some significance in Chapter 7, bankruptcy attorneys need to cast a critical eye on what the debtor says it costs them … [Continue reading...]

New Bankruptcy Lawyers – Beware Strangers With Candy

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Concern for bankruptcy clients who weren't well represented by brand new bankruptcy lawyers got me started with this project. As I told colleagues, some of the lawyering I saw was so bad that we needed to either teach the newcomers to be better lawyers or run them out of the practice, because they were unwittingly victimizing debtors. Recently, I've seen at least two cases of the reverse: … [Continue reading...]

The Mystery Of The Disappearing Means Test Deduction

By Cathy Moran, Esq. Filed Under: Means test

Just when you thought you figured out the means test, a debtor throws you a curveball. Like the Naked City, there are eight million means test stories out there. This is one of them. Last night, I'm reviewing a petition that a young lawyer I mentor was prepared to file. The debtor is recently married and he and his bride each make about $5,000 a month gross. Schedule A shows no real estate, … [Continue reading...]

Means Test: Mean and Meaningless

By Cathy Moran, Esq. Filed Under: Means test, Opinionated

Years after BAPCPA became law, I'm still grinding my teeth about the inanity of the means test. It consumes a huge amount of my time, gathering numbers about the cost of telecommunications services and my client's projected costs of health care. I get to know more about their ailments than anyone but their spouse and their doctor. For what? Tell me what real meaning lies therein as a measure … [Continue reading...]

Means Test: Getting Business Income Correct

By Cathy Moran, Esq. Filed Under: Business bankruptcy, Means test

I expect clients to conflate themselves and their wholly owned business corporation; I didn't expect the new bankruptcy lawyer to treat the corporation as if it didn't exist. Yet as I reviewed a B-22 for a rookie bankruptcy lawyer, I found all of the corporation's gross income included in the means test for the individual shareholder. When questioned, the young lawyer replied that … [Continue reading...]

Means Test & The Exemption See-Saw

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

What can my client do with non exempt cash or readily saleable items not protected by an exemption, the newbie asked. As I looked down my list of things to do with excess cash, I saw an issue I hadn't explored before: some of best ways to use up non exempt cash may result in trouble on the means test. My starting point in exemption planning is using the unprotected value to acquire … [Continue reading...]

Means Test Income And The Annual Bonus

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The means test can be seen as a simple form in your bankruptcy petition preparation package - a glorified Form 1040 to be filed with each consumer case - or we can view it as it truly is. The simple becomes hazy, and what we knew coming into this aspect of our practice is persistently uncertain . Even the most seasoned consumer bankruptcy attorney is routinely dumbfounded at the issues that … [Continue reading...]

Clients, Competence & Perjury

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The schedules are signed under penalty of perjury. Just for certainty, let me say it again: your client signs the schedules under penalty of perjury. My partner reported a scene from a 341 meeting she attended while I was on vacation: the case ahead of ours sported a schedule J that was blank, while the debtor had a $4,000 month income. Questioned by the trustee, debtor's counsel replied … [Continue reading...]

Counting to 90

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

This week I have apparently discovered bankruptcy lawyers who can't count to 90. Amazing, isn't it? Yet I've reviewed two cases where counsel failed to file the case such that judgment liens fell within the 90 day preference period. And these were cases where the liens had six figure totals and the debtor had assets. To review: a judgment lien perfected within 90 … [Continue reading...]

Primer on Reaffirmation Agreements

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Every Chapter 7 case with a car loan presents a reaffirmation dilemma. Should the client reaffirm? Should you certify "no hardship"? What happens if the judge rejects the agreement? Dallas bankruptcy judge Stacey Jernigan laid out a primer for attorneys on how it's done and what judges in her district expect from bankruptcy practitioners in a decisions in a case called Grisham, filed … [Continue reading...]

Means Test: Encouraged to Screw Up

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

With the influx of new personnel at the trustee's office, I'm seeing more flat wrong objections from the trustee's office to means test issues. One consistent theme is the assertion that the expense deducted is measured by the past six months. Balderdash. Even after BAPCPA, the means test is a tool for measuring projected disposable income. "Projected" is future. After all, we're supposed to … [Continue reading...]

Four Means Test Mistakes: Taxes

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Are you guilty of any of these means test mistakes dealing with taxes? Using the tax deductions from the pay stubs when your client traditionally owes taxes payable with the return Using the tax deductions from the paystubs when your client traditionally gets a substantial refund Using last year's tax as the measure for the projected taxes when debtor has reduced deductions going … [Continue reading...]

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