Category — Kansas Bankruptcy News

Topeka Bankruptcy Judge Janice Miller Karlin announced last week that she is reversing course and will follow the Pearson decision to allow debtors a means test deduction for ownership of a car without a debt against it.

Judge Karlin had earlier disallowed the car ownership deduction in In re Law, 2008 WL 1867971 (Bankr. D. Kan. 2008), following the decision by Kansas District Court Judge John W. Lungstrum in Wieland v. Thomas, 382 B.R. 793 (D. Kan. March 4, 2008), reversing Judge Robert D. Berger of Kansas City, KS, in In re Thomas, 2007 WL 2903201 (Bankr. D. Kan. Oct. 02, 2007). [Read more →]

It will be a little easier to qualify for bankruptcy relief when the income guidelines used for eligibility increase slightly on October 1.  A single Kansas earner will be able to make $894 more per year and qualify for chapter 7 bankruptcy relief.  A family of four will be allowed a $2036 more income per year in Kansas.

Here are the "means test" figures now in effect and the figures expected to be approved by the U.S. Trustee for bankruptcy cases file on October 1, 2008, or after.

• 1 earner                       $38,594      $39,488
• 2-person families    $52,989      $54,070
• 3-person families    $58,075      $60,906
• 4-person families    $69.831      $71,867
• 5-person families    $76,731      $68,548
• 6-person families    $83,631      $63,075

These figures come from the U.S. Census Bureau for each state and family size.  They are recalculated annually and adjusted for changes in the consumer price index, then adopted by the U.S. Trustee for bankruptcy purposes.

Debtors filing a bankruptcy petition must fill out a "means test" form to determine their ability to repay their unsecured debt.  You pass the means test if your income is less than the median income figures on this chart.  It is not quite that simple, though, because there are all sorts of legal arguments over the definition of family size and what counts as income.

See my post and other information on means testing on the Bankruptcy Law Network.  If byou have primarily non=consumer debt, you may be exempt from the means test.

The U.S. Bankruptcy Court for the District of Kansas issued Standing Order 08-02 eliminating the requirement of notice to creditors by the chapter 13 trustee in certain circumstances.  Here is the text of the order:

Notice to all creditors of post-confirmation motions to modify plan, which notice is required by Fed. R. Bankr. P. 3015(g), is waived when the motion is filed by a Chapter 13 Trustee, and the sole purpose of the motion to modify plan is to recover an asset that Debtor has been ordered to repay to the estate, but which he/she has not repaid. The only notice required will be to the Debtor and Debtor’s Attorney. This Standing Order will expire March 17, 2009.

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 →]

A Wichita car dealer who gave money to relatives before filing his bankruptcy case and lied on his bankruptcy paperwork was convicted of federal crimes this week and faces possible jail time for his fraud.

Evidence at trial proved he gave money to his wife and his brother prior to filing his bankruptcy case and he lied on his paperwork. He falsely said he had no bank accounts and he had made no transfers of money to relatives nor closed any bank accounts. He also charged $125,000 on credit cards within a year of filing the bankruptcy petition for airline tickets, jewelry and other goods. [Read more →]

The bankruptcy judges in Kansas have approved new language for all chapter 13 confirmation orders that will put an end to the abusive practice of secretly adding fees to a debtor's mortgage loan balance.

No real estate creditor shall ever assess, charge or collect, from either the debtor or the real estate collateral, any assessments, fees, costs, expenses or any other monetary amounts, exclusive of principal, interest, taxes and insurance, that arose from the date of the filing of the bankruptcy petition to the entry of the Order of Discharge except as may be allowed by court order or an allowed proof of claim.

[Read more →]

Kansas Attorney General Stephen N. Six issued the following statement on home mortgage foreclosure this week, urging people facing foreclosure to seek help from an attorney.

Home foreclosure is a growing problem in Kansas and across the nation. Mortgage fraud and subprime lending have left many homeowners stuck with home loans they can no longer afford.

My office recently convened a task force to investigate this problem. Consumer advocates met with representatives from lending and real estate industries to determine ways we can stem the tide of home foreclosure in Kansas.

[Read more →]

Jill Michaux has earned recertification in consumer bankruptcy law by the American Board of Certification. She was awarded her 15 year pin as a consumer bankruptcy specialist.

She was the first Kansas lawyer to be board certified in consumer bankruptcy law. Her partner, Mark Neis, was second. Today, they are the only board certified consumer bankruptcy specialists in Topeka and two of ten in Kansas.

Board certification means that Jill has met rigorous, objective standards and has demonstrated expertise in consumer bankruptcy law. She goes the extra mile to keep current on bankruptcy law changes by attending national seminars, participating in daily e-mail updates and by attending several times the hours of continuing legal education required by Kansas.

You expect certification from your doctor - expect it from your lawyer too. Hiring an attorney with expertise in any specialized field of law, such as bankruptcy, can be a bewildering experience. As a client, you want to make sure your attorney is experienced in consumer bankruptcy law. Choosing a board certified specialist in one way to make sure.

The Kansas income guidelines for the bankruptcy means test go up February 1, 2008.

Kansas Median Family Income by Family Size for Bankruptcy Cases Filed on or After February 1, 2008,

• 1 earner……….$38,594
• 2 persons……..$52,989
• 3 persons …….$58,075
• 4 persons …….$69, 831
• 5 persons …….$76,731
• 6 persons …….$83,631
• Add $6,900 for each additional individual