What New Bankruptcy Lawyers Need To Know: Beyond The Code

Assets in Bankruptcy Pose Valuation Issues

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Start Here

A bankruptcy lawyer seems to often have the unpleasant task of telling a debtor that their possessions have little value. I don't know whether it's a defense mechanism or just ingrained thinking, but I have clients tell me all the time that their assets have values far beyond what seems likely in the current market. Tools of the trade are a frequent example: the mechanic tells me his tools … [Continue reading...]

Bankruptcy Procedure Question? Ask a Clerk

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The bankruptcy judge ordered me to get the signature of an absent party on the written version of the order just made from the bench. So, what to do when that party was unwilling to sign? When the judge signed the order anyway, opposing counsel complemented me on knowing how to deal with the problem. He's practiced law even longer than I have and he said he wouldn't have known how to … [Continue reading...]

Develop a Bankruptcy Filing Checklist

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

As bankruptcy lawyers, we don't usually face the life and death situations that doctors do, but we do take our client's financial lives in our hands. For their sakes, and ours, we want to get it right. Which is why I found Atul Gawande's book The Checklist Manifesto compelling. The premise of the book is that no matter how expert you may be, well-designed check lists can improve … [Continue reading...]

Discharging Taxes in Bankruptcy: This Year’s Trap

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Income taxes are dischargeable in bankruptcy if they meet the three year rule; the two year rule; and the 240 day rule. When you count back for the three year rule (the date on which the return was last due without penalty is more than three years prior to the date the bankruptcy is filed), remember that in 2007, tax returns were due on the 16th of April. In 2007, April 15th was a Sunday, so … [Continue reading...]

Alternative to Bankruptcy: Do Nothing

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Start Here

Bankruptcy lawyers sometimes forget: not everyone worried about debt actually needs to file bankruptcy. The anxiety that brings someone to your office may not be grounded in a real understanding of the rights of their creditors. I recently saw a woman drawing disability pay and looking at very substantial retirement income. It seemed unlikely that she would work again. Her income, under … [Continue reading...]

Taxes Owed from Day One of New Year

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

April 15th is so ingrained in our thinking as Tax Day that it's easy to forget that the tax for the previous year is owed on the first day of the next tax year. Payment isn't due til April 15th, but the obligation exists before the return and payment are due. Why is this important for bankruptcy lawyers? The tax debt, even if payment isn't yet due, is a debt for purposes of the means … [Continue reading...]

Beware the Emergency Bankruptcy Filing

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

Real danger for client and lawyer lurks in the emergency bankruptcy petition: File without all the information about the client's assets and recent transfers and you risk getting family members sued and the client losing assets. Not to mention your loss of face or worse. Avoidable transfers Chapter 5 of the Bankruptcy Code deals with avoidable transfers, property of the estate, and … [Continue reading...]

Do Your Bankruptcy Schedules Tell the Client’s Story?

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

The last check before you file your client's bankruptcy schedules should be a step back to see if the schedules "tell the story". The background and the color don't make it to schedules and SOFA, but you need to read them from the trustee's point of view to see if they make sense and reflect the realities of the client's life. Things to look at before you push the button to file: Have you … [Continue reading...]

Exemption Choices for the Recently Mobile

By Cathy Moran, Esq. Filed Under: Exemptions, Start Here

Old and new consumer bankruptcy lawyers have a treasure in John Bates' masterpiece on the exemption laws of each state and the availability of those laws to non residents in bankruptcy. Why do I care what the exemptions are in any state but California? The Bankruptcy Code! ( what other answer did you expect from me? ) BAPCPA tried to eliminate any advantage a debtor might reap by … [Continue reading...]

Means Test & Creditors Claims: Enough is Enough

By Cathy Moran, Esq. Filed Under: Means test

When the means test projected disposable income number is greater than 100% of the unsecured claims, full repayment is sufficient. The means test calculation only kicks in under §1325(b) if a party objects; no one objects to repayment of everything that is owed. A new bankruptcy attorney brought me a B 22 form for a review: the monthly number he'd calculated was over $2500 a month, a … [Continue reading...]

When To File Bankruptcy

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

When to file bankruptcy turns out to be just as important as whether to file. I saw it playing out in a single day in my office. All three consultations on Friday featured clients intent on filing bankruptcy IMMEDIATELY. Each of them was certain that they had no time before some disaster would befall them if they didn't file bankruptcy. Yet, as we talked, I concluded the … [Continue reading...]

Getting the Most from the Means Test

By Cathy Moran, Esq. Filed Under: Means test, Start Here

When the means test look-back period for a well paid individual includes the end of the year, a bankruptcy lawyer cannot rely on the paystubs to define the tax deductions. That's because contributions to Social Security and other some other taxes are capped at certain income levels. Wages above the cap are not subject to the tax. So the later in the year the pay stub, the greater … [Continue reading...]

Fixing the Omission from the Schedules

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice, Start Here

Twice yesterday new bankruptcy practitioners asked about how to deal with debts or assets not listed in the debtor's original schedules. The answer in either situation is amend the schedules. As soon as you know that the schedules are not accurate on a meaningful issue, make them accurate. Creditor left out For an omitted creditor, you want to add them to the schedules and give notice to them … [Continue reading...]

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