Posts from — June 2008

There are lots of do's and don'ts when you file a consumer bankruptcy case. Recently, my NACBA colleagues across the country brainstormed to come up with a short list of don'ts for people thinking about filing for bankruptcy.

Violating these, and many other do's and don'ts, can cause you to lose property and get you into big trouble when you file for bankruptcy. If you make a mistake, even an innocent mistake, your attorney might not be able to reverse what you have done.

The best advice is not to act on your own - discuss what you want to do with your bankruptcy attorney first. You and your attorney should make your bankruptcy game plan together.

Here is the list compiled by my colleague, Jonathan Becker, of Lawrence, Kansas: [Read more →]

Among the major tweaks in the 2005 bankruptcy law revision is the so-called means test. Simply put, all consumer debtors must compare household income to their statewide median income of households of similar size. NOTE: debtors with business debts ARE NOT subject to the means test.

United States Code §707 (b) (2) (A) (i) (I) and (II). Reference: Chapter 7 Discharge.

Reigning in on the relative ease of filing and obtaining discharge of unsecured debt in chapter 7 is central focus of BAPCPA, but most debtors pass the means test leading blogger Steve Jakubowski to ask if the bark of the means test is worse than its bite? [Read more →]

BAPCPA (Bankruptcy Abuse Prevention And Consumer Protection Act Of 2005) has been characterized as among the best (or worst depending on point of view) examples of special interest federal legislation ever passed by Congress. The act’s history is important:

Under pressure from creditor lobbying efforts, Congress and the Clinton administration in 1994 funded a bi-partisan blue ribbon panel dubbed the Bankruptcy Review Commission. Its mission was a comprehensive study of the bankruptcy system in response to creditor interests’ complaints of widespread but undocumented abuses.

Democrats’ poor showings in 1992 and 1994 elections left Congress controlled by Republicans. President Clinton agreed to a commission to find the facts. The credit industry argued a significant number of Americans had the “ability to repay” their debts, but egged on by greedy bankruptcy attorneys, debtors were choosing instead to slough off debt. Debtors were cast as well-to-do credit card abusers who were financially irresponsible, increasing the cost of borrowing for others. Little or no evidence was ever offered to back up creditors’ arguments. [Read more →]