Bankruptcy Articles & Information

Fraudulent intent in case of failure

Bankruptcy Articles — Wed, 24 Feb 2010 18:39:56 +0000

Intention does not matter under the bankruptcy code. Under many
states’ laws a transfer to a relative for less than fair value creates
a rebuttable presumption of fraud. There is no such rebutting under
548, where the transfer for less than fair value while insolvent is
avoidable regardless of intent. The point is the transferee got [...]

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Domestic support obligation

Bankruptcy Articles — Sat, 13 Feb 2010 13:29:55 +0000

bankruptcy Judge says when you make someone pay more than what they can afford then they just flee so that is justification to limit court ordered DSO’s to an amount less than what the state court ordered. In the instant case the ongoing DSO is for $375 a month, and the arrearage is almost $200k. Judge says if he makes the bankruptcy Debtor pay more than $300 a month then the Debtor will just pack his stuff and move to Houston, or El Paso or California or some other large metropolitan area and we will never find him again. The fight was over the plan language that said the bankruptcy debtor could pay $300 a month toward the allowed claim of $57k and continue to pay $300 a month toward that claim after discharge, but said nothing about the ongoing DSO amount, or interest on the principal arrearage which was reserved for later litigation in the plan language.

Judge interpretation, even though, he says he has no authority to change a DSO is that everyone meant, or should have meant $300 for arrearages and ongoing support because that is all the debtor can pay, although he states that the plan language is not very clear. A deadbeat parent with 200k in support arrears would be spending some time in jail, and paying 65% of his net income here in NY. How does someone accumulate 200k in arrears at the rate of $375 a month? That would take something like 40 years. He is saying the parties agreed to this modification through the bankruptcy confirmation order and lack of objection thereto. This sounds like the discharge by confirmation that the 10th Circuit approved in In re Andersen and subsequently overruled in ECMC v. Mersmann. If the DSO was modified by confirmation, does the DSO Obligee have a claim of lack of notice.

Given that this type of change should only be done by AP, the DSO Obligee should at least be served, pursuant to 7004 and Rule 4 with the plan and given the opportunity (30 days) to respond, rather than what we see in some jurisdictions where plan confirmation occurs shortly after the 341. The DSO Obligee needs an attorney with a good background in due process. The recipient did return to WVA state court, and the state court did calculate the interest of the pre-petition allowed claim of $57k, and then added up the post-petition arrearages and interest and reduced that amount to a judgment of about $200k with ongoing current support in the amount of $375. The state of WVA then started wage withholding for the $300 for the pre-petition amount–as agreed, and an additional amount according to support charts for post-petition amounts. The debtor sued the state of WVA for contempt of a confirmed bankruptcy plan

Judge found the state of WVA in contempt, but said it was not willful because the state of WVA obviously couldn’t understand the plan language, but that he, Judge was interpreting the agreed plan language to mean that the total monthly payment for the life of the debtor was limited to $300 regardless of the ongoing support amount or the total amount of the arrearages because he believes that’s what the parties should have known the plan language obviously meant. Therefore he was not modifying an existing DSO because the parties had already modified the DSO by agreeing to plan language that he interprets as modifing the DSO, and that the parties knew or should have known that’s what the plan language meant.

The state of WVA and the receipient disagree that they understood the plan language to mean that the DSO was being modified, and, as pointed out above, the argument on appeal is that (1) there was obviously no agreement to modify the DSO because the state of WVA would not have knowingly violated a federal court order, and Judge so stated that WVA didn’t understand the plan language to forbid what they did, and that no evidence was submitted to show they did– that since a plan is a contract—and all plans must be submitted by the debtor–ambiguities are construed against the drafter AND (2) as suggested above if a debtor wants to modify a DSO in a bankruptcy it must be done by AP.

Proposed bankruptcy rules

Bankruptcy Articles — Wed, 10 Feb 2010 15:32:42 +0000

The Bankruptcy Rules Advisory Committee is considering two very important sets of amendments to the Bankruptcy Rules. The first set would amend Rule 3001 to require that a proof of claim include, if the claim is based on an open end credit agreement (like a credit card), a copy of the last account statement. In addition, any proof of claim must include an itemized statement of interest, fees and charges, the amount necessary to cure a default on a secured debt, and an escrow statement for a home mortgage. Failure to include information required would normally preclude the creditor from introducing it in evidence in any proceeding.

A new Rule 3002.1 would require mortgage lenders to provide notice to the debtor, debtor’s counsel, and trustee of all payment changes, and of all fees and charges assessed to the debtor’s account, and provide an opportunity for the debtor to object. It also establishes a mechanism for the court to determine at the end of the case whether the mortgage has been cured, and precludes a creditor from introducing evidence of any fees or charges for which notice was not provided under the rule.

The proposed rules are available at: http://www.uscourts.gov/rules/proposed0809/BK_Rules_Forms_Amendments.pdf

Automatic stay in bankruptcy

Bankruptcy Articles — Tue, 02 Feb 2010 23:04:07 +0000

Exception to automatic stay – 362(b)(22) added in 2005 doesn’t apply because debtor is not residing in property pursuant to a lease or rental agreement. Time to redeem has expired so debtor has a bare possessory interest, but even that is protection by the bankruptcy automatic stay. I’ve heard creditor attorneys verify that in ICLE seminars, waiting until end of the redemption period to file buys the debtor more time since they have to motion for relief from stay, and even after that they have to obtain an eviction order. Client will be a business bankruptcy case. But in December he paid his sister $2,000 on an Oklahoma personal loan. 547(c)(9) sets the minimum on a preference in a business debt case at $5475. The floor applies to the case, not the particular debt. So if the debt is not primarily consumer debt, preference floor is $5475. Insider preferences of less than that have to be disclosed on the SOFA, but are not recoverable.

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Will be the bankruptcy court to remove life insurance

Bankruptcy Articles — Tue, 02 Feb 2010 17:13:29 +0000

Life ins is not property of the Dallas chapter 7 estate, and depending on the terms
of the plan, may not be property of the C13 estate it may be exempt
under applicable law, and if not, this is one situation where vesting
on confirmation is better. I did a case a while back on a post-petition personal [...]

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Will I lose my IRA if file bankruptcy

Bankruptcy Articles — Sat, 30 Jan 2010 13:30:36 +0000

IRA rules limit contributions to 5 or 6 thousand per year. Anything in excess does not have to be undone. However, the excess is subject to a 6% IRS penalty. In Michigan, the excess contributed to an IRA (Section 408 of the Revenue Code) is not exemptable under (d)(12). However, the excess contributed to a Roth IRA (Section 408A of the Revenue Code) is. A rollover from a 401(k), 403(b) or 457 tax deferred account, which, if done properly, should have no effect on the timing of 13 filing. Section 522(b)(3) says that money that is in a fund or account that is exempt from taxation under various sections, including section 408A, is exempt. A penalty is not a tax any more than interest is. Also, I think the key language is a “fund or account” that is exempt from taxation. If the 6% penalty is a tax then no funds in any such account would be exemptable, even without an over-contribution. That would be a ridiculous construction so I think the 408A account is not subject to taxation but is subject to penalty.

Bankruptcy Can Stop Foreclosure

Bankruptcy Articles — Wed, 27 Jan 2010 16:23:08 +0000

The course to avoid foreclosures, bankruptcy may be the most reliable option, especially now that many homeowners are inf & # xF6; foreclosure king the best solution for many extreme financial difficulties. The bankruptcy filing put the foreclosure process on hold, which is very important for homeowners in the current scenario, when the economy facing a recession and may be influenced by it. But there are many issues to be resolved in this way, without there being a risk of bankruptcy. The questions that haunt our minds is “How long does the process of foreclosure arrested for?” and “What is the specific chapter of bankruptcy that a debtor needs to file?”

Bankruptcy Chapter 7, also known as liquidation, “completely eliminates all legal obligations of a debtor to pay unsecured debts. If the Chapter 7 debtor Clean before closing, the bankruptcy will temporarily stop the foreclosure until the following occurs: the bankruptcy proceedings and ends # xF6; RTS or lender may foreclose court to lift the automatic suspension. Unfortunately, if a borrower is far behind in their payments, and not have sufficient income to make payments on the debt is confirmed, this finding may be granted immediately.

A chapter 13, on the other hand, you can interrupt a process for permanent exclusion. A Chapter 13 bankruptcy consolidate debt and reorganize in an affordable monthly payment plan approved by the court. In comparison with Chapter 7 bankruptcy, not Chapter 13, does not completely eliminate the unsecured debt of a debtor and a debtor calls & # xE4; r to repay part or all of the debt. However, the debtor can pay its debts in affordable monthly payments for a period of three to five years, as set llts Court, according to monthly income, expenditure and activities.

Chapter 13 bankruptcy, also known as “clean”, the debt consolidation and reorganization in an affordable monthly payment plan approved by the court. Debts that are generally grouped in a chapter 13 bankruptcy mortgage loans, balances on vehicle loans, student loans, the debts of credit card and other unsecured claims. If your home is currently closing a bankruptcy under Chapter 13 stops the exclusion at any time Fö King of sale, and allows you to pay your mortgage arrears through the Chapter 13 bankruptcy.

But there are lots of things to think about that part of the debtor. One very important thing to consider Chapter 13 bankruptcy is that you must work or have a steady source of revenue for the repayment plan to be approved by the court. This is a temporary solution and if you have no way to pay your mortgage and it becomes very difficult, then maybe this is not & # xE4; r option for you to choose from. However, it should be used as a last resort because of its restrictive security for homeowners with a mortgage and the long-term consequences for the credit.

Can stop well known that the failure is a very serious step, with lasting consequences, but it can relieve debtors frå; n the process of foreclosure.

Things that matter before filing for bankruptcy

Bankruptcy Articles — Wed, 27 Jan 2010 01:00:36 +0000

It ‘important to understand the reasons behind the failure and the important things to know before filing bankruptcy. Why is this happening? Or the one that forces a borrower to declare bankruptcy Ari him or her? It is important to assess what factors you take this step to drop the debt burden overcrowded.

The first and most important is unemployment, which stops the income used to repay loans, the high cost of medical stop concentrating on paying debts, divorce, death of the sole breadwinner in family or other reasons of urgency or family conflicts that create a barrier for the borrower to clear the debts. A recent study reported that a number of bankruptcies in the United States were caused by large medical expenses. It was found that illness and medical expenses caused half (50 4 percent) of the 1,458,000 personal bankruptcies in 2001.

You know that the bankruptcy filing put the entire process of foreclosure, but registration is given after the bankruptcy, but may prove a fatal decision, it is important to examine the strands of Bankruptcy Code, which you can file. Chapters 7 and 13, can help provide relief from the nerve raking debts and must be aware of.

Chapter 7 bankruptcy, which is the settlement “that could provide relief because it reduces legal liability to pay his debts. The non-exempt property is then sent to the liquidator to sell pay debts. The debtor receives the discharge within four months. Chapter 7 helps because the debtor to start over. A debtor can keep property is exempt, but will throw out the Debt overflowing.

Chapter 13 Bankruptcy is reorganization “allows the flexibility to pay debts more affordable monthly payment plan approved by the court. CHAPTER13 bankruptcy made by people who want to pay their debts for a period of three to five years. That the debtor must have an income that is saved for daily expenses taken care of.

Why choose Chapter 13 and Chapter 7 bankruptcy?

The next thing that should also be noted is that the judge of what to choose. Chapter 13 bankruptcy is applicable only when you sincerely for your efforts to return, but with support fr & # xe5; bankruptcy court n. You can make changes to your mortgage or car loans. Opting for Chapter 13 bankruptcy when they are not eligible for Chapter 12 bankruptcy family farm, have left already, Chapter 7, and can not wait another eight years to implement, so why not go to the chapter 13 instead. Nari, where the property very unauthorized and will not give away all in Chapter 7 bankruptcy rules that you can go to Chapter 13, which saves even co-debtor on something.

Put in the key before the bankruptcy filing is therefore a critical need for them as a failure gari. Debtor issued 3 to 5 months after bankruptcy filed mitigate the possibility of foreclosure.

Credit unions: a cheaper, cleaner alternative to banks

Bankruptcy Articles — Tue, 26 Jan 2010 19:09:04 +0000

A Raleigh, North Carolina, new home owners John and Jennifer Hall made a smart choice: instead of choosing a loan schemes at risk from a bank – a decision has been disastrous for many of their peers, the couple applied for a loan through the North – Carolina State Employees’ Credit Union (SECU). The couple has done his homework and concluded that there is more to work with a non-profit financial cooperatives for buying a first home. In addition to lower fees and closing costs have been something else the SECU does not mean an employee of the credit union sat down with the pair of FOR; rklara advantages and disadvantages of various options mortgage. Since the Credit Union staff officers, there was no pressure, allowing the couple to see the Credit Union as a trusted advisor. “There are so many young parents who do not understand the advantage of going with a co-op, says John, who believes that all North Caroli Nian benefit not-for-profit financial cooperatives that help keep other financial institutions supervised by citizens remain eligible for competitive rates and taxes. “To be a member to make a big difference in your financial life! “You Belong you’re frustrated with your bank? Might be tired of paying those endless taxes, high interest rates and get bad customer service. And in light of the current financial crisis, then you may be among those with good credit are no problems obtaining a car or home loans, due to strict lending standards because of its banking sector. Fortunately, you have options. to provide the credit unions is a new option for corporate banking, while the same type of service. As members of the credit, you can open a checking or savings account, certificates of deposit and the purchase of F & # xe5 a loan. Some credit unions may also help to invest for retirement, or to follow courses in financial planning before you make your FOR; home interior. credit unions are cooperatives, owned by members (savers) that have something in common as if they work, live og & # xe5; church ri. Because credit unions tend to be small and to respond to a select group of people, you can expect a more personal relationship between the staff and members. Unlike commercial banks to generate profits for shareholders and outside shareholders, credit unions channel profits back to members Lee GRE taxes, preferential interest rates and higher dividends. According to the American Banker / Gallup, credit unions consistently rank high among consumers for the service and not; JDA customers every year since 1983. Keep Your Money Safe credit unions have emerged as a safe haven for consumers. Given that credit unions avoid exotic loans and risky investments that made many banks were relatively unaffected by recent financial crisis, Credit Union members have peace of mind knowing their money is. Kra credit unions are financially sound as they stick to conservative banking practices, such as request for advance payments and control of income in mortgage. While many banks chasing ever more exotic ways to make money, credit unions stuck to the basics. Many people of SS SLUG; TTA their funds in the hands of a Credit Union because they believe that the combination of credit are not FDIC insured. Nothing could be further fr & # xe5; truth n . Since banks and savings institutions, credit unions, deposits are insured up to $ 250,000 from the federal government, so that the same level of protection for investors who have a wealth of banking institutions. credit unions still LendingCommercial banks have recently reduced lending, including M & # xE4; people with good credit. The result is that many consumers are unable to return home and auto loans due to the narrow rules loan. This is not the case for credit unions, which continue to make loans to people with good credit ratings. In fact, credit unions now living a higher volume of loans, as consumers turn to them in large numbers after the final collapse of the banking sector. According to CUNA’s credit cooperatives 36 percent more loans to small firms during the first half of 2008 compared to same period in 2007, a reflection in part of cooperative nature of credit, while banks lend money to horde. Now, as conventional banks avoid lending to even creditworthy buyers to cooperate credit r ready to take a much larger than the traditional loan – including housing, cars and small loan companies. Connecting to a Credit Union Today! Although once associated with unions, hospitals, universities and other large groups of workers, unions credit are open to all public. There is also a “select employee groups” that offers credit union members to a network of affiliates. You may find, for reasons nga join a union credit, including:

Since 2005 there are 9346 credit unions in the United States, which means that most consumers can find a Credit Union has the right to join.

marriage and bankruptcy

Bankruptcy Articles — Tue, 26 Jan 2010 17:52:17 +0000

I have a potential client pursuing Chapter 7. We are waiting for her loan
modification to be final before filing which is pushing back the timeframe
for finishing the case. She has a wedding date which can end up being in the
window between the Chapter 7 filing date and the final discharge date. She
doesn’t want her future [...]

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