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12/24/09

Deduct Full Secured Debt on Bankruptcy Means Test

OK FOR CHAPTER 13 DEBTORS TO TAKE B22C DEDUCTION FOR FULL PAYMENT
RATHER THAN CRAM DOWN AMOUNT
In re Allen, Case No. 07-41327
February 2008, Judge Karlin

Objected to confirmation on the basis that Debtor’s means test calculations erroneously included the full amount of the pre-petition car payments rather than the reduced or  crammed-down amounts. In analyzing 1325(b)(1), the Court found that 707(b)(2)(A)(iii) applies and that Debtors need not only list the amounts they will actually pay through the plan. There is a split of authority on this important issue. This case was not appealed so no appellate decision is in the immediate future for the 10th Circuit.  See the Hoss and Arroyo decision by Judge Nugent for the opposite result.

Digest by:  Jan Hamilton, Trustee

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Filed Under: Chapter 13, Court Rulings, Means Test Tagged With: , , , , , , , , , ,
12/24/09

What Does Charged Off Mean?

Charged Off: This is an accounting term that means the creditor does not expect to collect on the debt. It relates to the creditor’s taxes. It starts time periods under the Fair Credit Reporting Act. It does not mean that the debt is no longer legally enforceable.

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Filed Under: Discharge, Financial Help
12/24/09

Don’t Be Fooled by False Letter that Says Your Bankruptcy is Dismissed – Your Stay Still in Effect

A Florida debt adjuster sent letters to Chapter 13 bankruptcy debtors in Kansas falsely telling them that their bankruptcy cases were dismissed and to call right away “to discuss the terms of your dismissal.”  What a scam!

These letters from First American Debt Solutions are absolutely FALSE! The bankruptcy cases are NOT DISMISSED! These letters are outrageous!  They frighten vulnerable consumer debtors and cause panic.  Debtors are tricked into thinking they are no longer protected by the bankruptcy stay against collection.

If you receive one of these outrageous letters, call your bankruptcy attorney right away.  She can assure you the letter is false, your case is active and you are still protected by the automatic stay.  She will want the letter and mailer to save as evidence against this company.  This fraudulent activity have been reported to the Chapter 13 Bankruptcy Trustee, the U.S. Trustee and the Office of the Kansas Bank Commissioner.

Here is part of  one letter two clients got this week:Continue Reading

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Filed Under: Bankruptcy News, Chapter 13 Tagged With: , , , , , , , , , , , ,
12/23/09

Car Deduction Allowed on Means Test, Reversed by District Court

CAR DEDUCTIONS ALLOWED EVEN THOUGH NO LIEN
In re Thomas, Case No 06-21108
In re Camacho, Case No. 06-20729
October 2007,  Judge Berger

UST Motion To Dismiss under 707(b) for presumed abuse based upon totality of circumstances was denied. The Court concluded that the debtors are entitled to claim vehicle ownership for expenses, even though debtors did not have liens or leases on the vehicles. (See In Re Howell, 06-11652 for opposing view from Judge Nugent.). Judge Lungstrum subsequently reversed and remanded Thomas, 382 B.R. 793 (D. Kan. 2008).

Digest by:  Jan Hamilton, Trustee

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Filed Under: Chapter 13, Court Rulings, Means Test Tagged With: , , , , , , , , , ,
12/23/09

What Does Confirmed Mean?

Confirmed: A plan of reorganization in Chapter 11, 12 or 13 approved by the court and binding on the parties is said to be confirmed.

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Filed Under: Business Bankruptcy, Chapter 13
12/22/09

No Early Payoff, But Chapter 13 Bankruptcy Plan Modification Possible

PLAN MAY NOT PROPOSE EARLY PAYOFF BUT 1329 MAY ALLOW POST
CONFIRMATION MODIFICATION
In re Kidd, et al, Case No. 06-41232
August 2007, Judge Karlin

The Court recognized changes in 1324(b)(4) and held that debtors may not propose an early pay off but may obtain the same in the right circumstances via 1329.

Digest by:  Jan Hamilton, Trustee

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Filed Under: After Bankruptcy, Chapter 13, Court Rulings Tagged With: , , , , , , , , , , ,
12/22/09

What Is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy: A repayment plan for individuals with debts falling below statutory levels which provides for repayment of some or all of the debts out of future income over 3 to 5 years. More in The Power of 13.

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Filed Under: Chapter 13
12/21/09

Means Test Form Controls Unless Significant Changes in Circumstances

B22C CONTROLS UNLESS SIGNIFICANT CHANGES IN CIRCUMSTANCES
In re Lanning, Case No. 06-41037
May 2007, Judge Karlin

Over the Chapter 13 Trustee’s objection, the Court confirmed the plan because of significant changes in circumstances at the time of filing that caused Line 58 on B22C to be higher than what the debtor could afford to pay. BAP and 10th Circuit Court of Appeals affirmed, Petition for Cert to U.S. Supreme Court pending. Lanning controls in Judge Karlin’s court, until, if and when, the decision is overturned.

Digest by:  Jan Hamilton, Trustee

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Filed Under: Chapter 13, Court Rulings, Means Test Tagged With: , , , , , , , , , , , , ,
12/21/09

What Is Chapter 12 Bankruptcy?

Chapter 12 bankruptcy: A simplified reorganization plan for family farmers whose debts fall within certain limits.

Chapter 12 Bankruptcy Is Like Chapter 13 On Steroids

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Filed Under: Business Bankruptcy
12/20/09

How Long Does Chapter 13 Last if My Income is Below Median?

BELOW MEDIAN MUST RUN 36 MONTHS, B22C IS TEMPORAL
In re Daniel, Case No. 06-20714
December 2006, Judge Somers

In a Below Median case, debtor’s income is determined by B22C and expenses by Schedule J and must “run” for 36 months (The Applicable Commitment Period) or pay  100% of all allowed unsecured claims. B22C is temporal, rather than a multiplier. Read carefully.

Digest by:  Jan Hamilton, Trustee

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Filed Under: Chapter 13, Court Rulings, Means Test Tagged With: , , , , , , , , , ,
12/20/09

What Is Chapter 11 Bankruptcy?

Chapter 11 Bankruptcy: A reorganization proceeding in which the debtor may continue in business or in possession of its property as a fiduciary. A confirmed Chapter 11 plan provides for the manner in which the claims of creditors will be paid in whole or in part by the debtor.

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Filed Under: Business Bankruptcy
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