A bankruptcy judge in Georgia ruled that a debtor would be refused a discharge even though he passed the Means Test.  At the time of filing, the Debtor paid monthly mortgage payments of $3,273 per month.  When calculating the Means Test, the Debtor deducted the mortgage payments, according to 707(b)(2)(A)(iii)(I).  The U.S. Trustee objected to the deduction and asked the Court to dismiss the case pursuant to 707(b)(2) and 707(b)(3).  The Court ruled the debtor was allowed to deduct mortgage expense, even though the debtor planned to surrender the property.  Thus, the debtor passed the Means Test, BUT the Court then ruled that since the debtor ...

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In re Crittenden: An Alabama Bankruptcy Judge, in In re Briana L. Crittenden, 19 CBN 1049In re Crittenden (Bankr. M.D. Ala. 2009), overruled an auto creditor's objection to the debtor's Chapter 13 plan, allowing a lowering of the interest rate.  Debtor purchased a vehicle from the creditor five weeks prior to filing a Chapter 13 case.  Due to unforeseen events, debtor filed Chapter 13.  The net effect of the filing was that the monthly amount the creditor would receive was reduced from $400 to $315 per month.  The Court reasoned that the debtor did not fraudulently incur the debt, and the plan did no significantly impact the creditor's ...

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Bankruptcy filings increased 35% from the first half of 2008 to the first half of 2009. According the the American Bankruptcy Institute, 681,217 bankruptcy cases were filed during the first half of 2009, whereas 503,749 bankruptcy cases were filed in the first half of 2008.  This marks a continued upward trend in bankruptcy filings from 2005, when Congress passed the new bankruptcy legislation. So what is driving the increased number of bankruptcy filing?  Take your pick: unemployment, foreclosures, student loans, credit card debt, medical bills, etc... Americans are over-leveraged; we have too much debt.  It's going to take time (not more ...

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1.  Chapter 7 Bankruptcy is still an option for most people, even after the bankruptcy laws changed in 2005. Many people believed (because creditors wanted us to believe) that it is very hard for someone to file Chapter 7 Bankruptcy after the 2005 bankruptcy amendments (BAPCPA).  The 2005 bankruptcy laws increased the amount of paperwork and the costs of filing, but most people who could file under the "old law" are still eligible to file under the "new law". 2.   99% of people who file Chapter 7 bankruptcy do not lose any of their property.  One of the biggest fears for people considering bankruptcy is how much of their stuff will they ...

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Bankruptcy laws can trace their roots to the Bible. The Old Testament had several laws mandating the forgiveness of debts every seven years, and even includes a form of redemption after foreclosure. Bankruptcy laws, or something similar, were enacted by the Romans. Our modern bankruptcy system has it's roots in British laws from the 1500's. Early bankruptcy laws favored the creditor; debtor's had few rights, and were often thrown in jail for not paying their debts. Fortunately, bankruptcy laws evolved from being a "sword" for the creditor to being a "shield" for the debtor. Unfortunately, the 2005 bankruptcy amendments took a step back ...

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Bankruptcy is a big step.  Hopefully, filing bankruptcy is a once in a lifetime event.  Making sure filing bankruptcy is right for you is important.  Here are 7 things to consider before filing bankruptcy. 1.  Bankruptcy will not ruin your credit for life.  Most people facing bankruptcy already have pretty bad credit.  Normally, the credit rating does not go down much (if any); more importantly, in bankruptcy, you discharge debt, which puts you back on track to sound financial dealings, which will eventually lead to a better credit rating. 2.  Bankruptcy law is very complicated.  You are allowed to file your own case, but it is rarely ...

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Bankruptcy filings declining?  According to an article at Credit Slips by Bob Lawless, bankruptcy filings declined in December and January.  I thought we were in the middle of the worst economic crisis since...well, since forever.  If bankruptcy lawyers are filing fewer bankruptcy cases, doesn't this mean an end to the economic crisis?  No. As Bob Lawless explain, historically, bankruptcy filings in December and January decline.  Although no one knows exactly why, most people think it is due to the holiday season.  My personal experience as a bankruptcy lawyer shows the same cycle.  Typically, I see a drop off in late November through the ...

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Birmingham business bankruptcies will increase in 2009, according to an article in The Birmingham News by Russell Hubbard. In short, every one is cutting back; businesses and individuals.  Purchase orders are down.  Manufacturing is down.  Unemployment is up.  Most businesses (and individuals) have operated on very thin capitalization over the last decade, relying on lots of debt; this is coming back to haunt us.  A slowing economy plus tightening credit is the "perfect storm" for many businesses; they just can't survive.  More business bankruptcies mean more job losses.  Unemployed people have a hard time paying bills, which in turn leads ...

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Bankruptcy is a complicated and confusing process.  Bankruptcy attorneys sift through numerous documents to determine if bankruptcy is an option for their client and if it is the best option.  Before filing bankruptcy, the client must give most of these documents to the bankruptcy lawyer.   Please note, the specific documents you MUST give your bankruptcy lawyer will depend on where (state/division) you file and the specific facts of your case. 1.  Paychecks for the last 2 (or 6) months. The bankruptcy code refers to this as "payment advices", but for most people this means their paycheck.  The bankruptcy lawyer will definitely want ...

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