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CloseDo I Need a Lawyer?

There is no requirement to use a lawyer to file for bankruptcy. However, some people decide to hire one to help them get through the process.

Whether you're a good candidate for doing it yourself, depends on the complexity of your financial situation, and your willingness to take the time to learn the rules of bankruptcy. (If you're not the type of person that is willing to follow instructions carefully, then self-help is probably not for you.)

Your Financial Situation

If your debts consist only of unsecured credit card debt, you may well be able to file for bankruptcy on your own.

However, other factors to consider are the amount and type of property you own. If you own your home, have substantial retirement savings, or other substantial assets you may want to consult with a lawyer to make sure your property is not at risk.

A good way to approach the decision of whether to hire a lawyer is to buy (and read) Nolo's book "How to File for Chapter 7 Bankruptcy." It will give you a good idea of what issues may arise when you file, and flags specific situations when a lawyer's help is called for. It will also give you a good idea of whether the filing process seems to complicated for you.

If your financial situation is simple, but you just don't want to deal with the forms, you might consider a using a Bankruptcy Petition Preparer to handle the form preparation.

Some lawyers may be willing to review your situation without taking on your entire case. If they see that your situation is very simple, some lawyers might even tell you that you can do it yourself.

One option is to get limited help from a lawyer combined with the services of a bankruptcy petition preparer. If you live in California, see www.bankruptcylawproject.com for more information about their "Affordable Attorney Advice" service, which, for a flat rate of $100, will answer all questions that may arise in the course of your bankruptcy, but not actually file bankruptcy for you.

Other Resources

The National Association of Consumer Bankruptcy Attorneys (NACBA) makes the case of why you should use an attorney and offers tips for those who cannot afford one. Close

CloseWhat should I expect from a lawyer?

If you hire a lawyer, make sure your lawyer is an experienced bankruptcy lawyer. Bankruptcy is a complex, unique area of law that is not something that a general practitioner can learn overnight. Ask your lawyer how many bankruptcies they have filed.

Your lawyer will probably have you fill in a questionnaire about your property, debts, expenses and income. A good lawyer will be able to determine quickly what kinds of debts will be dischargeable in bankruptcy. The lawyer should advise you to get credit counseling before you file, and will may even have a computer terminal in their office where you can do the counseling right there, online. Many lawyers have preferred credit counselors that they work with.

Lawyers are responsible for making sure that your information is accurate, so they will be asking you to bring in documentation about your finances, including pay stubs, tax returns, etc.

For more information about working with a bankruptcy attorney, check out Chapter 10 of How to file for Chapter 7 Bankruptcy. Close

CloseWhat is a "BPP" (Bankruptcy Petition Preparer)?

Bankruptcy Petition Preparers are non-lawyers paid by consumers to prepare bankruptcy documents, for filing in court.

Anyone can be a BPP, provided they comply with the rules governing BPP practice contained in the bankruptcy code.

Customers who use a BPP are representing themselves in the bankruptcy court. This means they are responsible for making the choices required of them in their case. They must also provide the BPP with complete and accurate information to be entered in the documents.

Because BPPs are not lawyers, their customers must obtain necessary legal information and advice from an independent source such as a self-help law book or a lawyer.

Think of it this way, A BPP's customers are their own lawyers and the BPP is their legal secretary. The customers have to be sufficiently informed to tell the BPP what to do.

If you are interested in becoming a BPP, see the Bankruptcy Law Project website at www.bankruptcylawproject.com.

Close

CloseWhat is Credit Counseling?

Credit counseling is now required for all persons filing for bankruptcy. It costs about $50 and can be done in person, on the phone, or over the internet.

A credit counseling session generally lasts about 90 minutes. They'll review of your financial situation, give you information about your rights and options, and propose a repayment plan for resolving your debt problems, if possible.

Credit counseling organizations are now screened by the federal government and only approved organizations can be used in bankruptcy. (Click here for the list of approved credit counseling agencies.) This regulation is a good thing. The field rife with rip-off artists and the regulation has been welcomed by legitimate credit counselors.

The FTC also publishes a useful pamphlet on how to select a credit counselor.

Close

CloseWhat is "debt consolidation"

Debt consolidation is the practice of taking out one large loan to pay off a bunch of smaller debts that are charging higher interest.

Debt consolidation may or may not be a good idea, depending on your situation. Lower interest is a good thing, but turning unsecured debts (like credit card bills) into secured debts (like a home equity loan) can be a costly mistake if you eventually file bankruptcy anyway. Unsecured debts can often be eliminated in bankruptcy, while most secured debts cannot. If you can't pay your secured debt -- or if the payments are late -- you may lose your home.

Also, the fees for setting up such loans can be expensive.

Close

Bankruptcy Law: Research Tools > Case Law Database > All Topics >

LegalConsumer.com Bankruptcy Research Database

An ever-growing body of case law, articles, and websites to help with your navigation of the pbankruptcy process.

Select a Topic...

 

All Topics:

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Issue # 71:
Procedure > Hiding assets

Procedure: Hiding assets leads to bad consequences for debtor

3 Cases

Case types
A:

Debtor hid asset; court found lack of disclosure intended to defraud creditors with no legit purpose - denial of discharge under 724(a)(4)

B::

Exemption denied to debtor where assets were originally not disclosed and court finds bad faith

C:

Discharge denied where petition contained lots of errors that were not propmpty fixed

Description:

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on Ch7
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Issue # 73:

Automatic Stay Violations

Cases

Case types
A:

Conduct found to be harassing

Description:

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on Ch7
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on Ch13
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Issue # 74:

Dischargeability: Willfull and malicious, fradulent, etc. 11 USC 523(a)

1 Cases

Case types
A:

Act found to be willfull and malicious

B::

Debt found to involve fraud

Description:

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on Ch7
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on Ch13
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Issue # 76:

Chapter 13: Plan modification issues: timing, valuations, surrender etc.

3 Cases

Case types
A:

Disposable income analysis, effective date, assessment of good faith

B::

Plan modification to surrender of collateral

Description:

Section 1329 governs plan modification

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on Ch7
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on Ch13
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Issue # 77:
Exemptions > IRAs > Inherited IRAs

Exemptions: Inherited IRAs exempt under either 522(b)(3)(C) or 522(d)(12)?

11 Cases

Case types
A:

Yes. Inherited IRAs are exempt

B::

No, inherited IRAS are not exempt.

Description:

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on Ch7
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on Ch13
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Issue # 81:
Secured Debts > Lein Avoidance

Secured Debts: Miscellaneous case on lien avoidance

Cases

Case types
A:

Description:

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Issue # 82:
Exemptions > IRAs > Defective IRAs

Exemptions: Are IRA's Exempt if brokerage company had retained a lien on the account for fees as part of boilerplate agreement?

3 Cases

Case types
A:

IRA is NOT EXEMPT if brokerage company retained a lien

B::

IRA IS EXEMPT if brokerage retained a lien

Description:

This topic was created to track cases that present the fact pattern found in In re Daley, 459 B.R. 270 (Bankr.E.D.Tenn 2011)
Debtor's IRA with Merrill Lynch was not exempt due to language in a standard Client Relationship Agreement which gave Merrill a Lien on all IRA funds used for Margin or borrowing. Debtor never did either, but the clause itself was enough to render the IRA not exempt, according to the judge.

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Issue # 84:
Exemptions > Public Benefits > EITC

Exemptions: Earned Income Tax Credit and/or Child Tax Credit a general "public benefits" exemption under state exemption law?

2 Cases

Case types
A:

EITC and Child tax credit ARE included within "public benefits" exemption

B::

ETIC IS a pubic benefit but Child tad credit IS NOT covered by "public benefits" exemption

C:

EITC and Child Tax credit ARE NOT covered "public benefits" exemption

Description:

Many states do not have a specific exemption for the EITIC but have held that they ar exempt under the general "public benefits" exemption

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01

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01

Issue # 25:
Means Test > Not required for cases converting from Chapter 13?

Chapter 7: Is Ch 7 Means Test Applicable to conversions from failed Chapter 13?

12 Cases

Case types
A:

No, Means test applies only to Chapter 7 filings, not to conversions from Chapter 13

B::

Yes, means test applies to converted Chapter 13 cases

Description:

The new law can pose a catch 22 for debtors if the means test forces them into Chapter 13 although their actual disposable income is inadequate to fund a Chapter 13 plan. Some courts have held that this Catch 22 is avoided by ruling that the Chapter 7 means test is not applicable to cases "Filed under" chapter 13 and then converted to Chapter 7

For converted cases, the case law appears to agree that the six-month income measurement period is based on the date of the filing of the original petition: conversion does not reset that date.

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01

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Issue # 50:

Procedure: IF Debt is Not Primarily Consumer Debt (e.g. it's mostly business debt), then Means Test Not Required

2 Cases

Case types
A:

Means test does not apply if debts are not primarily consumer debts.

Description:

Some debtors end up in bankruptcy because of a failed business. If most of the debtors debts are business debts, rather than consumer debts, then the means test requirement does not apply, according to these cases.

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01

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Issue # 55:

Means Test Exclusion: What "primarily consumer debt" means (707(b)(1)); What debts are NOT consumer debts under as defined in section 101(8)? Taxes? Student Loans?

13 Cases

Case types
A:

What is "primarily"

B::

What is "consumer debt"

C:

Are student loans 'consumer debt'?

Description:

Biggest exception to the means test of all is that if debts are primarily non-consumer, 707(b)(2) (the means test) does not apply.
(Note: this exclusion from the Chapter 7 Means Test form 22A does not apply to Chapter 13 version; form 22C).

But what is "consumer debt?" Student loans? Mortgages? Taxes? Personal injury liability? Cases have discussed these issues as have the US Trustee.

The US Trustee's position on these the non-consumer debt exclusion:
* "Primarily" means that no means test requited if less than 50% of total scheduled debt was incurred for personal, household or family purposes.
* Purpose of debt is judged at the time the debt was incurred.
* Home mortgages are typically consumer debt.
* Most tax debts are not typically consumer debt.

Practical issues to consider:

* Sometimes a business lease or other executory contract that's locked in for several years can push a debtor's overall total into a primarily non-consumer debt case.

* Conversely, when a large mortgage debt outweighs a debt owed by a failed business, a bankruptcy that appears non-consumer can to be a business bankruptcy may cross the line to be about "primarily consumer debts."

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03

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02

Issue # 15:
Means Test > Income > CMI six month window

Income: CMI six-month window: When is income "received?" When earned? When paid?

13 Cases

Case types
A:

when it is derived within six month window

B::

when it comes under debtors control (received) OR derived within six month window

C:

must both be derived AND in debtor's control (received) in six month period

D:

measurement of six-month period

Description:

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on Ch7
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04b

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3b

Issue # 24:
Chapter 13 > Current Monthly Income > Business Expenses

Income: Business Expenses; Where to deduct business expenses on Form 22C? Does CMI = "gross" or "net" business income?

6 Cases

Case types
A:

Ninth Cir: In Chapter 13, must list gross receipts on line 3 of form 22C and then report business expenses with other expenses (Wiegand, 9th Cir)

B::

Form 22C: Use net business income to determine CMI

Description:

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on Ch7
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07

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06

Issue # 10:
Means Test > Income > Insurance Proceeds

Income: Does it include withdrawal of assets, disability insurance proceeds, tax credits

18 Cases

Case types
A:

Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included."

B::

Income includes replacement income (e.g. proceeds of a private disability insurance policy

C:

Income includes "earned income tax credit"

D:

includes unemployment compensation benefits

Description:

(Spring 2006)) OUST contends that it includes: gambling winnings, cash gifts (even if not otherwise a "regular contribution"), litigation proceeds, trust income, disability and other non-Social Security disability payments but excludes Social Security benefits (e.g., retirement, survivors, and disability), tax refunds, and loan proceeds.

Does not include income tax refunds

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on Ch7
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07

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on Ch13
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06

Issue # 16:
Means Test > Income > Retirement Income

Income: Pension income vs. IRA withdrawal, etc.

7 Cases

Case types
A:

IRA withdrawal is not income (Zahn)

B::

401(k) withdrawals are NOT part of CMI

C:

410(k) withdrawals ARE part of CMI

Description:

Are distributions from an IRA treated as "income" for purposes of CMI

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on Ch7
form

09

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on Ch13
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08

Issue # 34:
Means Test > Income > Unemployment Compensation

Income: Are unemployment compensation payments included in income or part of "social security"

7 Cases

Case types
A:

Include Unemployment Compensation in CMI

B::

Do NOT include Unemployment Compensation in CMI

Description:

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on Ch7
form

09

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08

Issue # 83:
Means Test > Income > Unemployment Compensation

Income: Is excluding "social security" income bad faith?

3 Cases

Case types
A:

Chatpter 13 plan found in bad faith for faiing to include Social Security income

B::

Not bad faith to exclude social security income.

Description:

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on Ch7
form

14b

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on Ch13
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16b

Issue # 18:
Means Test > Household Size

Household Size & Joint Custody

1 Cases

Case types
A:

Joint Custody: Count child if living with you on filing date

B::

Joint Custody: General Discussion

Description:

Whether you count your joint custody kid as part of your household because they don't have a column for 1.5 people...

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on Ch7
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14b

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on Ch13
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16b

Issue # 20:
Means Test > Household Size

Household Size & Unborn Children

3 Cases

Case types
A:

Do not count child for purposes of household size and length of Ch 13 plan

B::

General Discussion

Description:

Household size matters a lot in the means test. Do you count your unborn child as part of your household? -- because the child WILL be part of your household during the future five years in which you would be paying into a hypothetical Chapter 13 plan...
Household size matters for purposes of median income, and for the amount of the expense allowances you are allowed according to the IRS tables.

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on Ch7
form

14b

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16b

Issue # 26:
Means Test > Household Size >

Household Size: Live-in Relatives & Roommates

12 Cases

Case types
A:

Live in daughter and grandson are part of household but must include contributions to household expenses

B::

Live in mother part of household but must include contributions to household expenses

C:

Cannot exclude household members to qualify for above-median expense allowances

D:

Roommate as household member

Description:

Some courts follow the Census bureau's "heads on beds" test Ellringer (who was in the household on the filing date). Other courts look to the definition of dependent from the IRS. You need to know what theory your jurisdiction follows. Here are a few selected cases. If you meet both tests, you're probably fine. Note that the U.S. Trustee's office advocates the IRS dependents test, but it depends on what your judge thinks.

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on Ch7
form

14b

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on Ch13
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16b

Issue # 28:
Means Test > Household Size

Household Size: Deceased Spouse

1 Cases

Case types
A:

Must include income from deceased spouse in past six months even if no longer part of household.

B::

No need to include income of deceased spouse

Description:

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on Ch7
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15

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17

Issue # 17:
Means Test > Income > CMI six month window

Chapter 13: "applicable commitment period" issues / rebuttal / conversions 1325(b)

16 Cases

Case types
A:

Use only calculations from Form 22C to determine Applicable Commitment Period (ACP) of 3 or 5 years, actual circumstances irrelevant for commitment period determination.

B::

Even a zero-payment plan must be 60 months if income above median. 1325(b)(4)

C:

Shorter period can be used if above median debtor has negative disposable income

D:

Shorter period can never be used if income is above median and trustee objects

Description:

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on Ch7
form

17

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13

Issue # 5:
Means Test > Income > Household Size > Non-Filing Spouse > Marital Adjustment

Income: Martial adjustment does not include ALL of non-filing spouse's income -- just that portion that contributed to household expenses.

6 Cases

Case types
A:

Spouse payment of own debts not part of household expenses

B::

Non-filing spouses total income relevant to "totality of circumstances"

C:

How to handle income of spouse who died in past six months

D:

Non-filing spouses total income not relevant to means test and cannot be basis of "totality of circumstances"

Description:

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on Ch7
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18

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17

Issue # 8:
Chapter 13 > Projected Disposable Income

Chapter 13: How is "Projected Disposable Income" Calculated for Above Median Income Debtors

92 Cases

Case types
A:

Use means test disposable income (preceding six month avg.) on form 22C and apply a multiplier to get Ch 13 projected disposable income

B::

Use "future" income, looking forward using Schedule I or future w/same income exclusions as MT form

C:

Form 22C is 'starting point'; may rebut presumption in 22C with evidence of changed circumstance

D:

Debtor may ask to change applicable date for six-month window for determining "current monthly income"

Description:

U.S. Supreme court finally resolves this question choosing to follow the line of cases started by In re Nowlin (type C) in this outline.
Held: When a bankruptcy court calculates a debtor's projected disposable income, the court may account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation.

Throughout its discussion the court seemed to agree with the "Type C" cases listed here that use form 22C as the standard for what expenses are and are not allowed, but these amounts can be adjusted if changes in the debtor's income or expenses "are known or virtually certain at the time of confirmation." Note that's a pretty high bar.

Note also that the court says you should keep the formula from Form 22C but adjust it based on facts. It does not say to throw out 22C and rely on Schedules I and J.

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on Ch7
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18

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17

Issue # 42:
Chapter 13 > Length of plan

Chapter 13: Length of plan for above median income debtors

6 Cases

Case types
A:

Above median income debtor must have 60 month plan even though no disposable income

B::

36 month plan sign of bad faith

C:

if no disposable income, then 60 month minimum does not apply

D:

Cannot shorten 60 month plan post-confirmation unless paying unsecured creditors 100%

Description:

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on Ch7
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20

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25

Issue # 41:
Means Test > IRS Allowances

Local Standards: Constitutionality of Means Test: Do regional variations in IRS Local Standards raise Constitutional issues?

2 Cases

Case types
A:

Means Test is not unconstitutional for applying different standards based on location

Description:

It's been litigated. No, the regional variations in IRS expense allowances are constitutionally permissible.

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on Ch7
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20B

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25B

Issue # 11:
Means Test > Expenses > IRS Allowances > Housing, Utilities, Mortgage/ Rent

Local Standards: Housing and Utilities AND Mortgage/Rent Expense

6 Cases

Case types
A:

Debtor entitled to whole IRS allowance for housing, even if the actual expense is less

B::

Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less

C:

What "non-mortgage expenses" include

Description:

Whether debtors are entitled to the full household expense allowance even if their actual expenses are less.

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on Ch7
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21B

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24B

Issue # 38:
Means Test > IRS Allowances

Local Standards: Health Care Expenditures

1 Cases

Case types
A:

Debtor allowed to claim IRS allowance in chapter 13 plan, regardless of actual health expenses

Description:

Can debtor take expense allowance regardless of lower actual expenses.

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on Ch7
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22A

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on Ch13
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27A

Issue # 12:
Means Test > Expenses > IRS Allowances > Vehicles > Operation & Maintenance

Local Standards: Transportation: vehicle operation expense

7 Cases

Case types
A:

Debtor entitled to operation expense, even if actual expense is less

B::

One debtor can own two vehicles

Description:

Two issues are tracked in the database.
1. Whether debtors are entitled to the operation expense even if their actual expenses are less,
2. Whether a single debtor can deduct more than one car.

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23

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28

Issue # 1:
Means Test > Expenses > IRS Allowances > Vehicles > Ownership Costs

Local Standards: Vehicle Ownership/Lease expense allowance -- contingent on existence of loan or lease obligation? (i.e. if owned free and clear)

92 Cases

Case types
A:

Requires loan or lease obligation

B::

Does not require loan or lease

C:

Unlike B, must at least show some ownership expenses other than lease or loan still qualify for allowance

D:

Does not require loan or lease, but lack of such expense may be considered when confirming chapter 13 plan

Description:

The Supreme Court ruled in January 2011, that the Means Test Vehicle Ownership allowance is contingent on existence of loan or lease obligation. In other words, if you own a vehicle "free and clear" and are not making any payments, you cannot claim the ownership deduction. (Ransom v. FIA Card Services, __ U.S. ___ (S.Ct 2011 ) )

Before the Supreme Court settled the issue, lower courts were split on this question.

Note that lower court cases that deny the allowance often mention that debtors can claim a $200 extra operation deduction for vehicles over six years old with more than 75K miles (based on the IRS practice of doing the same).

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23

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28

Issue # 2:
Means Test > Expenses > IRS Allowances > Vehicles > Operation & Maintenance

Local Standards: Does Allowance include IRS's additional $200 allowance for Operating Expense for Older/High Mileage Vehicles?

18 Cases

Case types
A:

$200 IRM is an additional operating expense even if no lease or loan

B::

Means test does not include additional $200 operating expense.

C:

Relevant Statutes

Description:

At one time, (before the Supreme Court ruled on the Ransom case), the court rulings and trustees routinely agreed that even if a debtor does not have lease or loan obligation, they are still entitled to an extra $200 operating expense allowance for vehicles more than 75K miles or six years old.

This is based on the fact that the IRS follows this practice and BAPCPA uses IRS transportation spending allowances in the means test.

However, since the Ransom case, courts have almost unanimously ruled that you can no longer take the $200 "clunker allowance," based on what the Supreme Court said in that case about

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on Ch7
form

25

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on Ch13
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30

Issue # 3:
Means Test > Income > Taxes Withholding

Taxes: How are income taxes treated under the means test (actual taxes or amount 'withheld'?)

22 Cases

Case types
A:

Use actual tax liability, not amount withheld; refunds are not income

B::

refunds are property of the estate to the extent they are attributabe to prepetition income

Description:

This issue often comes up in the case where taxes were withheld during the six months prior to the bankruptcy, but then are going to be refunded after the bankruptcy filing.

Courts will not allow the full deduction for tax withholding if the actual tax liability for the year will result in those amounts being refunded to the debtor.

The majority of cases post-BAPCPA hold that the allowable amount of the debtor's tax liability to be deducted on Form 22A Line 25 (Form 22C Line 30) is the debtor's actual tax liability -- not the amount
withheld from the debtor's paycheck over the past six months. If there is a discrepancy, the actual amount should be used.

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on Ch7
form

25

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on Ch13
form

30

Issue # 6:
Means Test > Expenses > IRS Allowances > Other Necessary Expenses > Student Loans

Expenses: "Other Necessary Expenses"

6 Cases

Case types
A:

Student loan payment found not included

B::

Telecommunication expenses found to be excessive

C:

Parochial school tuition found to be necessary

D:

Support for elderly parents

Description:

Part __ of the means test forms allows for various kinds of "Other Necessary Expenses" within specifically defined categories. These classifications are based on the IRS collection standards.

Case law in this area discusses various fact situations to determine whether they meet the criteria of an "Other necessary expense"

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on Ch7
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25

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Issue # 47:

Expenses: What constitutes a "luxury" vs. a "reasonable and necessary" expense?

13 Cases

Case types
A:

Second car for single debtor not a luxury where good cause shown

B::

Debtor can be forced to get cheaper alternative replacement

C:

Debtors NOT required to find cheaper replacement

D:

Debtor may not keep 'luxury' asset

Description:

Given the case by case nature of these decisions, it's hard to discern a pattern. But here is a collection.

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on Ch7
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26

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on Ch13
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31

Issue # 4:
Means Test > Expenses > Mandatory Payroll Deduction > 401(k) loan repayment deduction

Expenses: 401(k) loan repayment allowed in Chapter 13 but not in Chapter 7: b/c not a "mandatory payroll deduction" or "special circumstance" or " debt"

28 Cases

Case types
A:

Payroll deduction not allowed on Chapter 7 means test, even though they'd be allowed in Chapter 13

B::

Fact that payroll deduction for 401(k) loan repayment in Chapter 13 would result in $0 for unsecured creditors is not a "special circumstance" for Chapter 7 determination

C:

401(k) loans are not "debts" or "secured debts", therefore cannot be claimed as such on Chapter 7 means test

D:

Fact that payroll deduction for 401(k) loan repayment in Chapter 13 would result in $0 for unsecured creditors relevant to "totality of circumstances"

Description:

Chapter 7 Means test form is generally held not to allow deduction of 401(k) loans repayments anywhere on the form.

In a long line of cases, various debtors have tried various arguments, classifying the payments as as "secured debts" or as "necessary expenses"
In most cases, those attempts are rejected.

However, the fact that such expenses are deductible in Chapter 13, it is quite possible to have a scenario where forcing the debtor into Chapter 13 would result in no net benefit to unsecured creditors. In such cases, some judges have found it to be relevant among other special circumstances to override the presumption of abuse created by the Chapter 7 Means Test calculation on Form 22A.

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on Ch7
form

35

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on Ch13
form

40

Issue # 36:
Means Test > Expenses > Family member support

Expenses: Deduction for educational expenses of family member

2 Cases

Case types
A:

No deduction for support of adult daughter attending college away from home - muse be disabled or chronically ill

B::

College expense allowed where part of child support court order

Description:

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on Ch7
form

35

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on Ch13
form

Issue # 44:
Means Test> Expenses>

Expenses: Support for care of family members

10 Cases

Case types
A:

Expense allowed for support of elderly parents mortgage and tax payments

B::

No deduction for support of adult daughter attending college away from home - muse be disabled or chronically ill

C:

Expenses related to child care allowed

D:

Expenses peripheral to support payments were not priority claims.

Description:

the means test allows for expenses for care of family members, whether or not they are living with you.

Line
on Ch7
form

42

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on Ch13
form

47

Issue # 7:
Means Test > Expenses > Secured Debts > Loan Expense Deduction > Surrender

Secured Debts: Expense allowances for collateral that is to be surrendered (see also 9A)

45 Cases

Case types
A:

Expense Allowance allowed for items to be surrendered (Walker)

B::

Expense allowance NOT allowed for items to be surrendered (Skaggs)

C:

Expense allowance allowed unless property has ACTUALLY been surrendered (Singletary)

D:

No "phantom expenses allowed"

Description:

The means test Forms 22A (Chapter 7) and 22C (Chapter 13) allow you to deduct the full amount of secured debt payments you are currently making at the time you file your bankruptcy petition.

The question arises, what if you plan to surrender that property during the course of your bankruptcy. This issue is particularly relevant in Chapter 13 cases, where the case continues on for 3 to 5 years, and your ability to pay in the future is one of the elements the court must consider in confirming a proposed Chapter 13 plan.

In a Chapter 7 case, the issue may turn on whether the debtor has actually surrendered the property yet -- that is, if the payments are still "contractually due" at the time the means test form is filed.

This timing question can become relevant because a trustee must make the "abuse" determination (based on the means test form) within 10 days after the section 341 meeting, Meanwhile, the debtor has up to 30 days from the date of the original filing (or the date of the 341 meeting if that comes first) to state whether they intend to surrender the property, and then gets another 30 days after that to actually act on their intentions. Thus, at the time of the abuse determination, it is possible that the debts are still "contractually due."

All of this may be a moot point in many courts, however, because a judge can still find a debtor ineligible to file if the judge thinks there is an ability to pay. Some courts have allowed the deduction, under Sec. 707(b)(2), then ruled that the surrender of the property (and the removal of that debt) means that the debtor has enough funds to pay his unsecured debts and therefore will refuse to grant a discharge of those debts based on the "totality of the circumstances" Sec. 707(b)(3).

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Issue # 13:
Means Test > Secured Debts > Mortgage Expense Deduction > Surrender

Secured Debts: Mortgage Payment Deduction where Property is to be Surrendered

11 Cases

Case types
A:

mortgage payment contractually due is NOT deductible even if surrender is intended later

B::

mortgage payment contractually due is deductible even if surrender is intended later

C:

subordinate mortgages and liens after underwater property are "unsecured" and are therefore not deductible secured payments.

Description:

This issue comes up in three contexts.

1. Forms 22A: First is the threshold determination of whether the debtor qualifies for Chapter 7 or only for Chapter 13 at the time of the original finding, as determined by the means test (Form 22A), and

2. Form 22C: if the debtor goes the 13 route, the length of the "applicable commitment period" as determined by Form 22C-- a fancy way of saying whether the plan has to be 3 or 5 years.

3. The third context applies only to above-median income debtors in Chapter 13, where debtors must complete Form 22C to determine their "disposable income" and also, later must must propose an actual monthly payment plan to repay their debts, which must be reviewed and approved by a Judge who can reject a plan for non compliance with the law and feasibility (i.e. whether the debtor will really be able to afford the proposed payments? or on the other end, whether the debtor will be paying enough into the plan to satisfy the law's standards against "abuse" of the bankruptcy system.)

The case law deals with the complications that arise because the first two, based on Forms 22A (for Chapter 7) and Form 22C (for Chapter 13) seem to ask for a snapshot in time (at the date the debtor first files for bankruptcy, whereas, under traditional bankruptcy law, a judge can look at the "real world" of the debtors circumstances several months later, when it finally comes time to determine whether a proposed Chapter 13 plan can be approved. Courts are split on whether the 2005 bankruptcy amendments require judges to use the Form 22C calculation, or whether they can consider changes in the debtor's actual circumstances at when the plan is finally up for approval (called the "confirmation hearing").

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Issue # 19:
Chapter 13 > Secured Debts

Secured Debt: 910 Car Loans > amount includes financing of negative equity?

27 Cases

Case types
A:

Yes. Loan amount for negative equity on old car is protected under section 910

B::

No. Negative equity is not included in PMSI

C:

No. Entire debt is transferred into a non-PMSI claim

Description:

The 2005 bankruptcy amendments added a "hanging paragraph" (that is, doesn't have a separate subsection like all paragraphs should) to section 1325(a) that says that you cannot cramdown an purchase-money auto loan that was obtained less than 910 days

The question is whether when a debtor turns in a car for a trade in, whether the part of the new car loan that is meant to pay off the balance on an old car loan in included in the amount that is by the no-cramdown protection of 1325(a)

It is neither "all or part of the price" of a new car nor is it "value given to enable the debtor to acquire rights in or the use of" a new car

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Issue # 21:
Secured Debts > Ride Through

Secured debt: "Ride Through" still viable after BAPCPA? Can debtor keep keep property by making payments if reaffirmation submitted and rejected by court?

41 Cases

Case types
A:

Ride through not permitted if debtor did not propose a reaffirmation

B::

Depends on state law issues re waver of right to repossess if current payments are accepted

C:

"Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm

D:

Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest.

Description:

Before the passage of BAPCPA in 2005, five Circuit Courts had held that a "fourth option" existed in addition to the choices of "redemption" "reaffirmation" and "surrender".

This fourth option was nicknamed the "ride through" which essentially meant that the debtor's personal liability for the original debt was discharged, but the creditor was precluded from repossessing the item so long as the debtor remained current on the original contract payments.

In a "ride through" scenario, if the item suddenly becomes worthless, due to, say a car accident or deterioration, the debtor can simply stop making payments, surrender the now-worthless property, and owe not a penny more.

Understandably, ride through is an attractive option that consumer bankruptcy lawyers advocated for their clients in the jurisdictions that allowed it.

The question now is whether this option still exists.

At first blush, it looks like BAPCPA eliminated the "ride through" option, and many courts have ruled that way.

However, a strong argument has been made and followed by some courts that IF a debtor submits a reaffirmation agreement for approval, the court can effectively grant a "backdoor ride through" by disallowing the reaffirmation -- thereby satisfying the new law's requirement that the debtor pick one of the three options -- in this case reaffirmation.
The judge cooperates in setting up the ride through by disapproving of the reaffirmation on the grounds that the "ride through" option will give the debtor a much better deal, and as a consequence, the reaffirmation is not "in the debtor's best interest" as required by law.

End result: the contract goes forward under state law, whatever it happens to be. The Federal judges ruling on a matter of Federal Bankruptcy law is limited to only those provisions affected by it -- in this case, the debtor's personal liability for the debt is NOT reaffirmed, other aspects of the contract may still be enforceable under state law.

In some states, this means that that, as long as the debtor remains current on the payments, the property can't be repossessed, but the debtor is is no longer personally liable for unpaid amounts in the case of a default, but the property must be surrendered)

The Columbia Law Review Article makes the case that ride through should survive in those jurisdictions that allowed it.

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Issue # 22:
Means Test > Expenses > Secured Debts > Chapter 13 Cram Down

Secured debt: Can debtor take full amount of means test secured debt deduction if secured portion is to be crammed down or stripped off during Chapter 13 plan?

7 Cases

Case types
A:

Yes, Debtor can take full payment rather than cram down amount

B::

No, debtor can only take cram down payment amount

C:

Cannot deduct payments for wholly unsecured second mortgages that will be stripped off

D:

No "phantom expenses" allowed

Description:

Can a debtor deduct the full amount of current monthly under-secured debt payment if debt will be crammed down in a Chapter 13 plan

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Issue # 32:
Chapter 13 > Plans > Paying Mortgages Outside the Plan

Chapter 13: Paying mortgages outside the plan

3 Cases

Case types
A:

Arrearage can be cured in plan while contract payments continue outside plan

B::

"Ride Through" for real estate still exists

C:

Mortgage must be paid inside the plan

Description:

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Issue # 35:
Chapter 13 > Secured Debts

Chapter 13: Mortgage modification, when allowed

11 Cases

Case types
A:

mortgage must be secured only by real property, and that real property must consist ONLY of the debtors residence

B::

what is, and is not, a mortgage modification

C:

security interest in escrow account (as personal property) enough to remove home from anti modification protection of 1322(b)(2) allow cramdown of home

Description:

Section 1332(b)(2) prevents cramdown of residential mortgages which it describes as claims secured by a primary residence. Here are cases that talk about whether specific fact patterns do or do not fit within the protection of this section.

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Issue # 39:
Chapter 13 > Secured Debts > Judicial Liens

Chapter 13: Stripping Liens

13 Cases

Case types
A:

Liens can be stripped at ANY TIME. Don't need to wait for Discharge

B::

Lien Stripping requires adversary proceeding, can't be done by statement in plan

C:

Lien stripping allowed without adversary proceeding

D:

Lien Stripping not available to Chapter 7 Debtors

Description:

Cases about the procedure required to strip liens on over-secured property.

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Issue # 40:
Chapter 13 > Secured Debts

Chapter 13: Treatment of wholly unsecured 2nd mortgages

15 Cases

Case types
A:

When senior homestead liens exceed the property's value, junior lines are counted as unsecured debt when determining Chapter 13 debt limits

B::

Wholly unsecured junior mortgages cannot be stripped without an adversary proceeding

C:

Wholly unsecured junior mortgages can be stripped without waiting for Ch 13 discharge

D:

Wholly unsecured junior mortgages cannot be stripped without a Ch 13 discharge

Description:

Cases that deal with the effect of undersecured 2nd mortgages on plan payments and correct procedures to strip them.

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Issue # 51:

Secured Debt: 910 Car Loans > does surrender of undersecured property = satisfaction in full of debt?

4 Cases

Case types
A:

Yes, surrender fully satisfies the debt

B::

No, surrender does not fully satisfy the debt, the deficiency leaves creditor with an unsecured claim

Description:

The issues argued in these cases are whether the hanging paragraph allows a debtor to surrender a 910 vehicle in full satisfaction of his debt. If not, then, "the remaining debt must be treated as an unsecured claim in the Chapter 13 plan. Although the debt "need not be paid in full, any more than [the debtors] other unsecured debts, [] it [cannot] be written off in toto while other unsecured creditors are paid some fraction of their entitlements." In re Miller

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Issue # 60:

Secured Debt: 910 Car Loans > Miscellaneous Issues

36 Cases

Case types
A:

Time Period

B::

Acquired for personal use v. business use

C:

Purchased for third party

Description:

So-called "910 loans" (Section 1325(a)) apply only to vehicles purchased for "personal use"



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Issue # 61:

Secured Debts: Interest on Secured Debts

15 Cases

Case types
A:

Interest on Secured Debts, generally

B::

Interest on 910 loans >> Interest = Till rate of interest

C:

Interest on 910 loans >> Interest = Contract rate

Description:

Before the passage of BAPCPA, the Supreme Court in Till ruled that a bankruptcy court could and must reset the interest rate on contractual secured debts to an interest rate based on the prime rate, rather than the contract rate of interest.

That rule survives BAPCPA but there was some question of whether this rule was applicable to so-called "910 loans" (for cars acquired less than 910 days ago). Most courts say yes, Till applies to those loans.

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Issue # 9:
Means Test > Abuse Presumption > 702(b)(3) "Totality of Circumstances"

Chapter 7: "Totality of Circumstances" 707(b)(3): Debtor permitted -- or not permitted -- to file Chapter 7, regardless of means test result.

64 Cases

Case types
A:

If debtor plans to surrender collateral, lower expenses can be considered dismissing for "totality of circumstances"

B::

Ability or inability to fund a Chapter 13 plan is relevant to finding of abuse under "totality of circumstances" and/or special circumstances for NOT finding abuse

C:

ability to repay 401(k) loan a factor in finding abuse under "totality of circumstances"

D:

abuse found where debtor could reduce "excessive" housing or other expenses

Description:

Even if you pass the requirements of the means test, a court can still find that you don't qualify for Chapter 7 bankruptcy.

The means test simply is an initial step to see if there is a "presumption" of abuse, based on the calculations therein.

Even if those calculations don't result in a presumption of abuse, under 707(b)(2), a court can still find abuse if the "totality of circumstances" demonstrates "abuse" of Chapter 7 OR because of "bad faith" on the part of the debtor (generally involving hiding assets or other evasive conduct).
As stated in In re Booker:
"in assessing whether the filing was made in bad faith, this Court should focus more on conduct. Conversely, when assessing whether the case should be dismissed as an abuse based upon the totality of the Debtors' financial circumstances, the Court should consider primarily, if not exclusively, the Debtors' ability to pay."

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Issue # 27:
Means Test > Trustees deadline for claiming abuse

Procedure: Deadline for Trustee to claim "abuse" by debtor - 10 days after 341 meeting

13 Cases

Case types
A:

Runs from date first set for 341 meeting

B::

Runs from conclusion of 341 meeting - so if it's delayed, so is deadline

C:

Deadline does not apply to 703(b)(3) motions to dismiss based on "totality of circumstances"

Description:

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Issue # 53:
Means Test > Special Circumstances >

Special Circumstances: Can't fund a Chapter 13 makes Chapter 7 OK?

4 Cases

Case types
A:

Inability to fund a 13 plan is reason to allow a Chapter 7 despite failing the means test

B::

Inability to fund a 13 plan is irrelevant - Chapter 7 denied

Description:

"because Congress has simultaneously directed that ERISA contributions and loan repayments be deductible from CMI in Chapter 13 cases, on the facts presented, such a conversion would yield no distribution to unsecured creditors ... the difference in treatment causes an absurdity that is directly contrary to the congressional intent, that while debtors with an ability to repay creditors should file under Chapter 13, debtors lacking that ability are to be permitted Chapter 7 relief."
-In re Siler, 426 BR 167, (Banrk.W.D.N.C. 2010)

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Issue # 57:
Means Test > Special Circumstances >

Special Circumstances: Miscellaneous Cases

19 Cases

Case types
A:

Item is a special circumstance

B::

Item is not a special circumstance

C:

Definitions/ descriptions

Description:

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Issue # 29:
Student Loans > Chapter 13 > Creditor Classifications & Discrimination

Student Loans: Handling of payments Debts in Chapter 13

7 Cases

Case types
A:

Cannot discriminate vs. other unsecured creditors

B::

No discrimination found where student loan paid pro-rata with other unsecured creditors in addition to payments outside of plan

Description:

While student loans are nondischargeable, they generally can't be given preferential treatment under the plan, compared to other unsecured creditors. However, there are legal ways to maximize payments on nondischargeable student loans. In court districts that hold that Form 22C determines PDI, any excess "actual" income is considered "discretionary" and can be used any way the debtor wishes.

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Issue # 30:
Student Loans > As Special Circumstances in Chapter 7

Student Loans as "Special Circumstances" to overcome 707(b)(2) presumption of abuse.

15 Cases

Case types
A:

Student loan found as a special circumstance to overcome presumption of abuse

B::

Student loan does not qualify as special circumstance to overcome abuse presumption

Description:

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Issue # 31:
Student Loans > Chapter 13 Hardship Discharge

Student Loans: "Undue Hardship" Discharge Cases under 523(a)(8)

35 Cases

Case types
A:

Debtor failed to meet hardship standard; student loan not discharged

B::

Debtor met hardship standard; student loan discharged

C:

Debtor can meet hardship discharge standard even though failed to participate in ICRP program

D:

Debtor's hardship cannot be self-imposed

Description:

Various cases of hardship claimed and analyzed by courts. Case by case determination.

Section 523(a)(8) governs discharges of student loans. A student loan "undue hardship" discharge is available in either a Chapter 7 or Chapter 13 bankruptcy, under 523(a)(8).

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Issue # 52:
Student Loans > Chapter 13 > Creditor Classifications & Discrimination

Student Loans: Discharge possible through plan confirmation and notice, without adversary proceeding

2 Cases

Case types
A:

Plan that approved discharge of student loan is binding on creditor if creditor has proper notice

B::

No discharge of student loan where there was no adversary proceeding

C:

Adversary proceeding required, but discharge stands due to creditor's failure to object to plan after proper notice

Description:

While student loans are nondischargeable, and can only be discharged with a showing of undue hardship, occasionally a Chapter 13 plan will be approved that discharges a student loan, and if there is no objection, what happens when then plan is completed?

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Issue # 33:

Exemptions: Constitutionality of State Bankruptcy-Only Exemption Laws

14 Cases

Case types
A:

General discussion of issue but not on point

B::

State bankruptcy-only exemptions are NOT preempted by Federal Law

C:

State bankruptcy-only exemptions ARE Preempted by Federal Law

D:

Debtors are limited ONLY to bk-only exemptions, even if other state exemptions are more generous

Description:

This topic collects a few bizarre rulings that go against established precedent to state that state "bankruptcy-only" exemption laws are unconstitutional. These cases fly in the face of many many years of established federal law and will probably eventually be overturned.

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Issue # 37:
Exemptions > Homestead

Exemptions: Miscellaneous Cases

72 Cases

Case types
A:

Must file homestead declaration if property is not yet occupied. ( Idaho)

B::

Homestead Exemption limits for "interest" acquired within 1215 day period

C:

Choice of Law, spouses can be forced to pick separate exemptions

D:

Other...

Description:

A collection of various cases on a variety of exemption issues in various states, and federal limits on exemptions.

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Issue # 43:
Lawyers > What BPPs can't do

BPPs, Lawyers, and public protection rules

17 Cases

Case types
A:

BPPs not authorized to give info on exemptions etc.

B::

BPP charged too much for services

C:

Lawyer services found incompetent

D:

Excessive Lawyer Fees

Description:

This topic collects cases that have claimed to "protect the public" by restricting what services BPPs can offer

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Issue # 45:
Exemptions > Tenancy by Entirety

Tenancy by Entirety: Assorted issues

6 Cases

Case types
A:

How to value a single spouses share of entireties property for bankruptcy purposes

B::

TBE Law is "In Rem" -- based on where the property is located,unlike other exemptions, which are "in personam" -- based on where the person i.e.. the property owner) is located.

Description:

Can be a confusing topic. Here are some cases that are good at explaining it.

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Issue # 46:
Chapter 13 > Plan confirmation

Chapter 13: Favoring one unsecured creditor over another in a Chapter 13 plan

1 Cases

Case types
A:

Student Loan Cases >> see topic Student Loans: Chapter 13...

C:

Credit Card balance could be paid in full under plan to maintain card for debtor's business

D:

Payment recovered by trustee.

Description:

Because student loan debt is nondischargeable, debtors tend to want to give it more attention than other unsecured debts when it comes to their Chapter 13 plan. These cases explore various attempts to do that inside of "outside" the plan.

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Issue # 48:
Procedure > Credit Counseling Requirement

Procedure: Failure to compete credit counseling within 180 days of filing requires dismissal

7 Cases

Case types
A:

Case must be dismissed where no certificate of credit counseling completion

B::

Case must be dismissed where credit counseling was completed MORE than 180 days prior to filing

C:

Exception made for debtor who failed to complete credit counseling on time

D:

Can credit counseling be completed on day of filing, or must it be completed the day before filing

Description:

BAPCPA new requirement, that a debtor must complete credit counseling within 180 days prior to filing, is for the most part, and inflexible rule

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Issue # 49:

Chapter 13: Attorney Fee Issues

10 Cases

Case types
A:

Attorney Payments in Chapter 13 plans

B::

Attorney's fees for stay violations

C:

Other Attorney fee issues (including Chapter 7)

D:

No attorney's fees

Description:

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Issue # 54:
Means Test > Income

Chapter 13: Debtor may request alternate six month measuring period for CMI if result would be more accurate

5 Cases

Case types
A:

Allows Debtor to request a resetting of the six month period if debtor does not file Schedule I

Description:

This odd procedural chicanery is made possible by section 101 which says that if you don't file a Schedule I, the judge can set the applicable date for measuring CMI.

There is some question whether the debtor can make a motion to do this. Some cases seem to say yes.

This line of cases has been viewed as an alternative to the either or debate over whether to use Form 22C or Schedules I and J in determining "projected disposable income"

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Issue # 56:

Procedure: Miscellaneous Cases on Bankruptcy Procedure

41 Cases

Case types
A:

Standing

B::

Burden of Proof

C:

Mandatory v Discretionary

D:

Discovery Rights

Description:

Various cases on bankruptcy procedure

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Issue # 58:

Filing Requirements >> Paperwork required

8 Cases

Case types
A:

Re: tax returns

B::

Undocumented Claims

C:

pay stubs

D:

Mailing Matrix

Description:

Kinds of paperwork that must be submitted to complete your bankruptcy petition, and when those requirements can be waived.

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Issue # 59:
Secured Debts > Proofs of Claim > Documentation

Proof of Claim: Documentation Required for Valid Claim

17 Cases

Case types
A:

Secured treated as unsecured where creditor does not support claim with adequate documentation of security

B::

No 9011 sanctions for filing an undocumented where due diligence shown

C:

Credit card claims must break out which parts are penalties

Description:

Claims for secured debts owed can be denied if supporting documentation is inadequate and the claim is challenged

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Issue # 62:
Chapter 13 > Procedure

Chapter 13: Debtor's right to have own case dismissed

2 Cases

Case types
A:

Debtor can move to have own case dismissed

B::

Request for dismissal can come only from trustee or judge

Description:

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Issue # 63:
Procedure >

Trustee's right to set aside "preferential" pre-petition transactions

9 Cases

Case types
A:

Transfers to relatives

B::

Transfers to creditors under unsavory circumstances

C:

Transfer to a creditor

Description:

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Issue # 65:

Non-Dischargeable debts under 523(a): assorted issues

24 Cases

Case types
A:

523 (a)(6) "willful and malicious"

B::

523(a)(7) fines and penalties

C:

523(a)(2) $ amount spent on luxury goods within 90 days of filing for relief

D:

Non-dischargeable debt other than under 523(a)

Description:

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Issue # 66:
Secured Debts > Documentation

Secured Debts: Cases concerning whether a security interest has been properly filed

1 Cases

Case types
A:

Requirements for mortgages

B::

Requirements for improvements to home (e.g. insulation, siding, etc.)

Description:

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Issue # 67:

Chapter 13: When debts are considered 'domestic support payments' for purposes of repayment priority in a chapter 13 plan

1 Cases

Case types
A:

B::

Welfare and foodstamp overpayments (sinister line of cases)

Description:

Payments for domestic support get priority treatment under a chapter 13 plan. (i.e. they get paid first) So it matters allot whether a debt is classified as this kind of debt. Lately there have been cases that are expanding this definition to include repayment of welfare or foodstamp overpayments.

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Issue # 68:

Secured Debts: Stripping Liens in Chapter 7 using Section 506 not allowed (except in 11th Circuit)

8 Cases

Case types
A:

Lien stripping under 506(d) IS NOT available in Chapter 7

B::

Lien stripping under 506(d) IS available in Chapter 7 if lien is wholly unsecured

Description:

Generally this practice is not allowed in Chapter 7 -- only in Chapter 13. The Supreme Court in Dewsnup v. Timm in 1992 prohibited the practice of using 506(d) to strip a partially secured lein. But a few rare cases, most notably the 11th Circuit, have recently held that Dewsnup does not apply to cases of wholly unsecured liens, and has held that prior precedent allowing elimination of such liens is still controlling precedent in the 11th circuit. .

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Issue # 69:

Chapter 13: Plan provisions, Miscellaneous issues

16 Cases

Case types
A:

Debtor could impose extra disclosure requirements on mortgage holder regarding allocation of plan payments

B::

Debtor could not include certain restrictions on creditor within plan

C:

Debtor could not require creditor to accept less than full payment for release of lien.

D:

Debtor must follow model plan required by local rules

Description:

Sometimes debtors want to propose extra contractual rights regarding disclosure of how the creditor is applying payments or timing of payments. Creditors often object. Here are cases that discuss various plan proposals.

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Issue # 70:

Chapter 13: Debtor must have sufficient income to fund plan to be eligible for Chapter 13

1 Cases

Case types
A:

Debtor with negative monthly income cannot qualify for Chapter 13 relief if Trustee objects

Description:

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Issue # 72:
Exemptions > Homestead

Exemptions: Adding "100% of FMV" to claimed dollar-amount bankruptcy exemptions - Schwab v Reilly

9 Cases

Case types
A:

Claiming exemption amount as 100% of FMV is proper way to guard against future appreciation of asset from date of filing.

B::

State law exemptions does not allow debtor to use "100% of FMV" as valuation of asset.

C:

Trustee canot object to Chapter 13 plan when objection is really a late objection to an exemption valuation, where the debtor had put 100% FMV

D:

Trustee can object to 100% FMV valuation where statute assigns a dollar limit and trustee contends asset is worth more than that. If no objection from trustee, exemption is treated as completely exempt.

Description:

The Supreme Court in Schwab v Reillly stated that, if you are claiming exempt property at specific dollar amounts, you should indicate to the trustee if you believe that dollar amount renders the asset fully exempt, by adding the phrase "100% of FMV" to the dollar amount exempted.
This puts the trustee on notice of your position and if he/she does not agree, they must object then, rather than wait to see if the asset appreciates. This prevents the trustee from sitting on property (e.g. a house) to see if the value will go up. For example, an underwater house could be listed as having a exempt equity of "$1 100%FMV"

If the trustee does not object to the debtor's assertion as to the asset's value within the time allotted by Fed. R. Bankr. P. 4003(b)(1), the the exemption is deemed correct whether or not there is a colorable statutory basis for the exemptions. Taylor v. Freeland & Kronz, 503 U.S. 638, 644, 112 S.Ct. 1644, 1648 (1992).
See In re Massey, Case No. 11-41059-MSH, (Bankr.D.Mass 2011).

If the debtor does not put "100% of FMV" after the stated exempt amount, the issue of whether the asset is fully exempt remains an open issue, which the trustee can challenge later, on the ground that the debtor's asserted value of the exempt amount was not an assertion as it was 100% exempt. See, Schwab v Reilly, 130 S.Ct. 2652 (Supreme Court 2010).

Line
on Ch7
form

999

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on Ch13
form

999

Issue # 75:
Chapter 13 > Procedure

Chapter 13: "Liquidation test" / "best interest of the creditors test" of 1325 (a)(4) -- issues, timing, computation, deductions

3 Cases

Case types
A:

Liquidation analysis starts with value of assets then substracts admin and other costs of sale

B::

Test must be applied under 1329 whenever a plan modification is proposed

Description:

Line
on Ch7
form

999

Line
on Ch13
form

Issue # 80:
Exemptions > Wage Garnishment

Exemptions: Does Wage Garnishment Law Create an Exemption In Bankruptcy?

11 Cases

Case types
A:

State Wage Garnishment Law DOES NOT create an exemption under bankruptcy

B::

State Wage Garnishment law DOES create an exemption under bankruptcy

C:

Federal Wage Garnishment Law DOES NOT create an exemption under bankruptcy

D:

Federal Wage Garnishment Law DOES create an exemption under bankruptcy

Description:

 

Cases on:


 

 

Welcome, New York users of Nolo's

How to File for Chapter 7 Bankruptcy

How to File for Chapter 7 Bankruptcy
LegalConsumer.com helps you find local information and services to help you file for bankruptcy.

If you don't own the book, you can still use this site and the free means test calculator.

Don't own a copy?

Learn more...

Albin Renauer, the operator of LegalConsumer.com and the Means Test Calculator, is also a coauthor of Nolo's How to File for Chapter 7 Bankruptcy.

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But first, use the book to find out whether you qualify for Chapter 7 -- and whether or not it's the best way to deal with your debts. It's important to learn what bankruptcy cannot do. You don't want to go to all the trouble of filing bankruptcy only to find out that the it won't help solve your particular problem or kind of debt. The book clearly explains what doesn't bankruptc yan and cannot do.

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How to File for Chapter 7 Bankruptcy doe s not cover business bankruptcies, farm reorganizations (Chapter 12) or individual repayment plans (Chapter 13). For Chapter 13 bankruptcy, see Nolo's  Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time.

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-Forbes

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"Exceptionally clear."
The New York Times
"How to File for Chapter 7 Bankruptcy advises on everything from how to file court papers to how to respond to threats from creditors.... A do-it-yourself bankruptcy book for people who can’t afford expensive lawyers."
Newsweek
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Kiplinger’s Personal Finance Magazine
"Can help you decide if bankruptcy is the right option for you."
Detroit News
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Los Angeles Times
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Accounting Today

Customer Review

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Richmond, VA
Chapter 13 Bankruptcy

Chapter 13 Bankruptcy

Filing Chapter 13 bankruptcy lets you cut down debts and keep valuable assets.

If you're considering Chapter 13 bankruptcy, which lets you wipe out some of your debt and pay back the rest over time, use this plain-English guide to decide whether or not it's right for you.

Nolo's Chapter 13 Bankruptcy breaks down the Chapter 13 process and provides clear explanations of the law. First, you can:

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  • how Chapter 13 can help you avoid foreclosure
  • whether you can reduce your car loan balance, or the balance on other secured debts
  • whether you can get rid of second mortgages or home equity debt

If you think Chapter 13 bankruptcy could work for you, you'll be ready to:

  • determine (with the book's forms and step-by-step instructions) whether you have enough income to come up with a repayment plan that the court will approve
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  • rebuild your credit after bankruptcy.

This newest edition includes new information on hiring and working with a lawyer, recent court rulings that interpret the federal bankruptcy laws. You'll also find the atest bankruptcy exemption laws in your state, which determine what copy you can keep, and recent IRS standard expense amounts, which affect Chapter 13 plan payments.

For Chapter 7 bankruptcy, see Nolo's How to File for Chapter 7 Bankruptcy. If you own your own business and are considering Chapter 7 bankruptcy, see Nolo's Bankruptcy for Small Business Owners.

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-Forbes

"This is the best book going if you choose to file alone or if you want background on the Chapter 13 process."
-Attorney Gary Klein, Coauthor of Consumer Bankruptcy Law and Practice

"An excellent resource …"
-Consumers Digest


Press Reviews

"In Nolo’s usual thorough fashion, here is a guide to an alternative to the typical Chapter 7 Bankruptcy."
Orange County Register
"An excellent book that can guide you through the [Chapter 13] process."
Forbes Magazine
"Chapter 13 Bankruptcy will save you a fortune in attorney fees and confusion."
The Midwest Book Review
"This is the best book going if you choose to file alone or if you want background on the Chapter 13 process."
Attorney Gary Klein,
co-author of Consumer Bankruptcy Law and Practice
"An excellent resource..."
Consumers Digest
"Contains many tear-out forms, federal and state exemptions charts, and the most recent legal documents and instructions on how to fill them out. "
Reference & Research Book News

 

The New Bankruptcy

The New Bankruptcy

If you're feeling overwhelmed by debt, you may be considering bankruptcy. But is filing bankruptcy the right solution for you and your family? Find out with this plain-English book.

The New Bankruptcy provides the strategies, clear-cut answers, and information and you need to figure out whether bankruptcy can help solve your debt problems. Find out:

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  • other ways to handle your debt problems

The latest edition of The New Bankruptcy includes updated lists of assets you can keep (exemptions) when you file bankruptcy, plus the latest rules handed down by the Supreme Court as it interprets the federal bankruptcy law. You'll also get worksheets to help you determine whether you can file for bankruptcy, helpful checklists, and easy-to-understand information for all 50 states.

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Legislation Alert... H.R. 5244

Credit Card Bill Passes House, To Senate

According to Inside ARM (Sept 25, 2008)

"The legislation eliminates retroactive interest rate hikes, late fees that push cardholders over their credit limits, and double-cycle billing, among other reforms." more...

The New York Times has written this editorial (Sept 13, 2008) urging action, and the house has passed it.

Read more...

See Also...

Other useful resources if you're interested in bankruptcy links.

Bankruptcy News

There's more right here, at LegalConsumer.com

If you're interested in bankruptcy links, you may also be interested in our special pages on:

  • Bankruptcy News where you'll find a news feed with links to interesting articles and blogs posts, and current legislation
Legislation & Politics

For keeping track of the influence of money in Congress.

The Foreclosure Survival Guide

The Foreclosure Survival GuideKeep Your House or Walk Away With Money In Your Pocket
(4th edition, 2013)


by Attorney Stephen R. Elias

Facing foreclosure? Know your options!

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For more products, visit LegalConsumer.com's Bankruptcy Bookstore on Amazon.com


 

 

 




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