Bankruptcy

The 401(k) in Chapter 13

Posted on July 01, 2008
In a recent decision, a Massachusetts Bankruptcy Judge ruled that a Chapter 13 debtor may deduct contributions to a 401(k) retirement plan while in bankruptcy. It?s a ruling anyone contemplating chapter 13 should pay attention to. The debtor?s schedules listed his gross income as $9,666...

Walking Away from the Mortgage and the Home? Consider this?

Posted on June 27, 2008
Some homeowners are giving up on the thought of keeping their home. There are a number of reasons for this. And if you are among the many homeowners contemplating walking away from their home, and the mortgage debt, you should consider a few things...

Game Over: Chapter 13 Debtor Sent Packing to State Court

Posted on June 26, 2008
A chapter 13 can be dismissed for lots of reasons: there is no money to fund a plan, the plan cannot be confirmed, or (as I discussed yesterday) tax returns have not been filed. A chapter 13 may also be dismissed for another important reason: the case was not filed in good faith...

Storm Preparation: Bankruptcy & Tax Returns II

Posted on June 25, 2008
When I was in college, Hurricane Gloria was bearing down on Southern New England. I went to stay with my grandparent at their house in Tiverton. As the winds were blowing (and at the insistence of my grandmother), we nailed plywood to the windows that faced the water...

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Where Did It All Go?

Posted on June 19, 2008
Keeping good financial records is always a good idea and if you?re filing bankruptcy, having good records on hand will help your case go smoothly. As married debtors in the Western District of Pennsylvania recently learned, not having them can lead to a denial of the Chapter 7 discharge...

Storm Preparation: Acceptance

Posted on June 18, 2008
The fifth ? and last stage of the Kubler-Ross grief process is acceptance. In researching and preparing for this blog, I had one nagging question in my head: how the heck do we get there? How does someone get to a point where they accept that they must seek the protection of a US Bankruptcy Court from their creditors? The answer is simply not easy and the only way I think I could describe it to you is to share my own journey through grief?and how I got to acceptance...

Sunday news...

Posted on June 15, 2008
MSNBC presents the Housing Bubble in Four Chapters. Over at Calculated Risk, there's some news about Sunday board meetings, which "are never good news." And over at the Washington Post: Anatomy of a Meltdown: The Credit Crisis (hat tip, Calculated Risk)...

News for a Friday the 13th...

Posted on June 13, 2008
From CNBC: Those $600 "economic stimulus"/"loan on next year's tax refund" checks: they are going to keep us out of a recession. For now (but what do you do if your bills are more than $600?). From Bloomberg: Foreclosures up 48% in may and repossessions have doubled...

Fake Accident Claim Leads to Nondischargeable Debt

Posted on June 12, 2008
Bankruptcy is available for honest debtors who have found themselves in unfortunate circumstances. Not every debtor is honest, nor is every debtor in unfortunate circumstances is entitled to bankruptcy. Take the case of William Berrien: I presume he was in unfortunate circumstances because he found himself in need of money...

Storm Preparation: Depression

Posted on June 11, 2008
Our journey through the Kubler-Ross model takes us to stage four: depression. If I wrote that people who are overwhelmed by debt may be depressed, and implied that this might be some new-found discovery, some might congratulate me on my mastery of the obvious...

Massachusetts Debt Collector Gets Sanctioned by Florida Bankruptcy Court

Posted on June 10, 2008
A Massachusetts debt collector along with the creditor has been sanctioned by the bankruptcy court in Florida for violating the discharge injunction. On April 4, 2007 Olson filed a Chapter 7 petition in the US Bankruptcy Court for the Southern District of Florida...

8th Circuit: Failure to Stop Abuse is not a Willful Injury

Posted on June 09, 2008
This recent bankruptcy court decision is not an easy one to discuss, and I'll warn my readers up front, this may not be an easy read. The case posed this question: Can a mother who allowed her child to be abused to the point where it lead to his murder escape the penalties for his wrongful death in bankruptcy? I know what my heart said...

Reaffirming Mortgages

Posted on June 06, 2008
When a debtor ?reaffirms? the debt, they are removing that debt from the bankruptcy process. They are agreeing to pay the debt, even though it would be otherwise discharged. For the reaffirmation to be enforceable there must be an agreement which must comply with the bankruptcy code and it must be filed and in some cases approved by the bankruptcy court...

High Income Debtor Gets Chapter 7 Relief

Posted on June 05, 2008
There are these nasty rumors being spread around that bankruptcy is no longer available to people. I hear ? time and time again ? that people think bankruptcy is not available because of the ?means test? or because it?s ?harder to wipe away debts.? A recent decision out of Bankruptcy Court for the District of Nebraska involving a debtor with a high household income confirms otherwise...

Storm Preparation: Bargaining

Posted on June 04, 2008
Of the five stages of the Kubler-Ross Model that people facing bankruptcy go through, the most potentially problematic is the third stage: bargaining. I suggest that this stage might invite the most problems because it is here that debtors do anything and everything to avoid bankruptcy...

Mass AG Sues Option One

Posted on June 03, 2008
Massachusetts Attorney General Martha Coakley's office has brought suit against Option One. From the press release: Today, Massachusetts Attorney General Martha Coakley?s Office filed a lawsuit in Suffolk Superior Court against Option One Mortgage Corp...

Storm Preparation: Stage Two, Anger

Posted on May 28, 2008
This week the focus is on anger, the second of the five stages of grief. People in a debt crisis might be angry at themselves, their family members, their political leaders or the local mortgage broker. There might also be a whole host of regrets that come to the surface as well: they might regret buying the house, the car or taking that new job they just got laid off from...

Predators in our Midst: A Warning for Homeowners Facing Foreclosure

Posted on May 27, 2008
I know that attorneys and other professionals may send written solicitations to homeowners who are facing the possibility of foreclosure. However, I have heard that there are unscrupulous individuals who may be posing as attorneys or are providing bankruptcy ?assistance? when in fact, they are not qualified to do so...

Hoping to Modify a Loan with Countrywide?

Posted on May 21, 2008
You might be interested in this from Housing Wire: Countrywide['s] CEO mistakenly replied directly to a troubled homeowner?s form hardship letter, characterizing it as ?disgusting.? Specifically, in response to a form hardship letter from one Daniel Bailey, Mozilo wrote: This is unbelievable...

Storm Preparation: Stage One, Denial

Posted on May 21, 2008
As I mentioned last week, Storm Preparation is covering the five stages of grief as it applies to bankruptcy. Denial is the first of the five and is the first stage we?ll cover in this series. Denial has been interpreted as ?a conscious or unconscious refusal to accept facts, information, reality, etc...

Section 523(a)(8): Reality v. Student Loans

Posted on May 20, 2008
It is exceptionally difficult ? and for many, impossible ? to discharge student loans in bankruptcy. Section 523(a)(8) exempts such loans from discharge unless the debtor can show that exempting the debt from discharge will ?impose an undue hardship on the debtor and the debtor?s dependants...

I Have a Bone to Pick with a Credit Union

Posted on May 19, 2008
I also have a bone to pick with the firm they have retained for collections. I?m not going to name them ? for now. But I am compelled to share what happened to a former client. This client filed chapter 13 in 2000. The credit union didn?t file a proof of claim on time...

A Lesson in Exemptions

Posted on May 16, 2008
In May 7 decision the First Circuit Court of Appeals ruled that a debtor was limited to the amount of his stated objections. For those thinking of preparing cases on their own, or for others with perhaps different motives, the case teaches a good lesson: you reap what you sow...

Did Congress Pop the Balloon?

Posted on May 15, 2008
A chapter 13 debtor proposes a plan to pay creditors over a period of time. Their creditors may include credit cards and utilities, and as in most cases I deal with, prepetition mortgage arrears. In some cases, debtors simply make a monthly payment to the chapter 13 trustee over the life of the plan...

Storm Preparation: The Stages

Posted on May 14, 2008
I?ve of written about the emotions that one goes through when contemplating bankruptcy. In one of my older blog postings, I harkened back to a cold February day where I had to put my 16 year old cat to sleep. There were a plethora of emotions that filled that experience, and some of which were the same that I see in my clients who are facing debt problems...

Audits Have Returned

Posted on May 13, 2008
In January, the Executive Office of the US Trustee announced that audits of consumer debtor cases were suspended due to budgetary constraints. On May 9, the US Trustee program announced that it was resuming random audits. Originally, 1 out of every 250 cases filed in a judicial district could expect to be selected...

Storm Preparation: Stop Using Credit

Posted on May 07, 2008
By the time many people contact a bankruptcy attorney, their credit card balances are already high ? if not at their limit. Sometimes, when there is room to spare on the balance, it can be tempting to use credit if a bankruptcy filing is down the road...

The Case of The Dream Pool

Posted on May 06, 2008
I recently read a bankruptcy court decision concerning a very serious matter: nondischargeability of a debt. While serious, there was also a bit of humor in it. The facts of this case were just too good not to share. The Plaintiffs were homeowners who wanted to have a swimming pool...

Pro Se Perils: No Ticket and No Excuse

Posted on May 05, 2008
There seem to be debtors everywhere who think they can file bankruptcy without an attorney. Of course, in many, many cases, debtors only end up causing themselves greater problems. A case out of the Eastern District of Pennsylvania proves my point. The debtor in that case got his case dismissed because he did not received the requisite credit counseling...

Storm Preparation: Look at your Debt and Plan Accordingly

Posted on April 30, 2008
Since the housing bubble that is deflating or exploding (depending on your perspective), it is becoming more and more common for debtors seeking to reorganize to be seeking bankruptcy protection. To be a chapter 13 debtor your debt cannot exceed a certain amount...

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