What New Bankruptcy Lawyers Need To Know: Beyond The Code

Rescuing A Troubled Chapter 13: The Unseen Threat

By Cathy Moran, Esq. Filed Under: Chapter 13

We all get sucked in, at some time, to trying to rescue a Chapter 13 bankruptcy case gone bad. Dismiss and refile is often an appealing strategy. But, make sure that you don't let a bad situation get worse. Get your arms around Bankruptcy Code §109(g). When only a do-over will do, don't wait around. No payments for months The debtor came to me for help when the trustee moved for … [Continue reading...]

What Bankruptcy Counsel Forgot

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

How do you forget capital gains taxes? More easily than you would think, apparently. When I see the same blunder twice in two months and the price tag to the client approaches $100,000, it's time to write about it. It surfaced in two Chapter 11 cases for individuals where I have subbed upon conversion to Chapter 7. My first reaction was to write this as a "see, you shouldn't take … [Continue reading...]

Crushing Tax Change For Injured Consumers

By William Purdy Filed Under: Bankruptcy Practice, Opinionated, Tax

The "Tax Cut Act" actually increased the tax on consumer recoveries. Under the new tax law, most damage awards a consumer recovers stand to go, in large part, to the IRS. So even if you are successful in vindicating your legal rights, the expenses of getting the award aren't deductible from the gross award. The taxing authorities end up getting a large hunk of the total … [Continue reading...]

Delay Division of Community Property At Peril of Bankruptcy

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Put off the division of community property in a marital dissolution at your peril. Hesitate and you risk all of the community property being swept up in a bankruptcy by the other spouse. And you'll have little control where community property assets fall. Community property is all in The threat begins with the bankruptcy law provision that all the community property becomes … [Continue reading...]

700 Words Yield $21K

By Cathy Moran, Esq. Filed Under: Attorneys fees

Have I got a story for you. A rousing tale of schedules, hearings, frustrations, and ultimately fortunes, traceable to a good story in the fee application. Maybe that's a bit overblown, but I'm telling this story with a purpose. Good stories lead to fair compensation for bankruptcy attorneys. Fee applications aren't hard Filing fee applications is central to sustaining an above-average … [Continue reading...]

Parker: Sweet Decision On Stay Violations

By Cathy Moran, Esq. Filed Under: Chapter 13

I don't know just what makes Parker such a treat for me, but it delivers multiple thrills to my bankruptcy lawyer heart. It's a stay violation case with a BIG sanctions award. It's a clearly, simply written opinion that lays out the circuit law on multiple issues. It hits hard at HOA hubris. It analyzes when a claim arises. It looks at surrender and vesting, mysteries near and dear … [Continue reading...]

List It Or Lose It: When Actual Knowledge Isn’t Enough

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

To actually effect abandonment of unadministered assets in a bankruptcy case, the asset in question must appear on Schedule A/B. That's the hard teaching of Stevens v. Whitmore from the 9th Circuit BAP. A passing reference to an asset in the SOFA isn't sufficient. Neither was the fact the trustee explicitly knew about the claim then subject to litigation. If the claim wasn't scheduled … [Continue reading...]

Why Your Bankruptcy Client Doesn’t Understand You (And How To Fix the Problem)

By Cathy Moran, Esq. Filed Under: lawyer skills, Start Here

Bankruptcy terminology, so familiar to lawyers, stymies clients. Even common English words seem to flumox our clients. We are a pair, divided by our common language. Even without legal jargon, we talk past each other. Words at war How do we misunderstand each other? Let me count the ways: If you've seen more than three clients, you've experienced the fact that, between … [Continue reading...]

Diaz & The Tax Refund

By Cathy Moran, Esq. Filed Under: Means test

On its face, Diaz (Diaz v. Viegelahn , No. 19-50982 (5th Cir. Aug. 26, 2020)) is a pretty straightforward decision that struck down a local form plan as violating a below-median income debtor's right to use her tax refund to finance necessary expenses for maintenance and support. On a deeper level, it appears to highlight the complications of using the IRS to effect non-tax social policy. In … [Continue reading...]

Ensure You Understand Insurance In Bankruptcy

By Cathy Moran, Esq. Filed Under: Exemptions

Sometimes, issues that you've just skimmed over burst forth in bunches, demanding attention. Lately, that issue in my bankruptcy cases has been insurance. Because its treatment varies so, we need to be asking more pointed questions of clients about insurance policies and the debtor as beneficiary. Unmatured life insurance Starting with exemptions, §522(d)(7) makes an unmatured life … [Continue reading...]

6 Steps to Ethical Unbundling of Bankruptcy Representation

By Cathy Moran, Esq. Filed Under: Attorneys fees

No matter how many hoops the client dutifully jumped through, without adequate inquiry and communication, the bankruptcy attorney was slammed for unbundling his services. The representation agreement at issue excluded representation in any adversary proceeding filed, as do most such agreements, I imagine. The client initialed every paragraph of the 19 page representation agreement, and the … [Continue reading...]

Reaffirmations Impose Impossible Demands On Bankruptcy Counsel

By Cathy Moran, Esq. Filed Under: Counseling clients

When BAPCA gutted the ipso facto clause, reaffirmation was left as the only way a debtor could be assured of retaining his wheels. Car lenders took sides back then, then changed sides, on whether they would automatically repossess a vehicle when the debt was not reaffirmed. Some wanted the in terrorem effect of losing the car to spur reaffirmations and the full panoply of legal … [Continue reading...]

Hearsay Exception: How Do I Get This Into Evidence?

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

Quick: tell me everything you know about Federal Rule of Evidence 803(17)! If you're like me, there's deafening silence. I've apparently skated through forty years of bankruptcy practice without really considering how Kelly Blue Book figures get into evidence. If it worked, I just went on. (Hint: it's FRE 803(17). But a change in California homestead law, and a nudge from Judge Stephen … [Continue reading...]

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