The National Consumer Bankruptcy Rights Center (NCBRC) has filed an amicus brief on behalf of the National Association of Consumer Bankruptcy Attorneys (NACBA) membership in the U.S. Supreme Court case of Clark v. Rameker (In re Clark), No. 13-299.  This case involves whether or not a debtor may exempt an individual retirement account (IRA) that he has inherited.

A recent Bankruptcy Appellate Panel decision found that the debtor may not exempt her federal Child Tax Credit refund under Missouri’s exemption for “public assistance.” Hardy v. Fink (In re Hardy), No. 13-6029 (B.A.P. 8th Cir. Dec. 23, 2013) (notice of appeal to 8th Cir. filed January 2, 2014).

To read more about this case and find a copy of the opinion, go to the National Consumer Bankruptcy Rights Center (NCBRC) at http://www.ncbrc.org/. Please support NCBRC by making your donation today! http://www.ncbrc.org/

NEW MEANS TEST FIGURES have been announced by the U.S. Trustee Program for use with bankruptcy cases filed on or after November 15, 2013. Here are the Kansas income numbers based upon family size:

1 – $43, 793

2 – $57,502

3 – $65,394

4 – $72,453

add $8100 for each individual in excess of 4.

The Kansas numbers are higher for one and two person families, slightly lower for three person families and almost $4000 lower for four person families. Below are the figures for Kansas bankruptcy cases filed May 1 through November 14, 2013:

1 – $42,577

2 – $56,581

3 – $65,907

4 – $76,402

The Kansas bankruptcy court is open for business even if the federal government shuts down. Cases may still be filed. Automatic stays still go into effect stopping collection. Help is still available. See how a government shutdown will affect bankruptcy courts.

Announcement from the Court

The Kansas Bankruptcy Court issued the following statement today, September 30, 2013:

If the government shuts down because of a lapse in appropriations, the Judiciary would use available funding balances to maintain operations for approximately 10 business days.  If the lapse in funding extends beyond the 10 business day period, the Judiciary plans to reassess its situation and provide further guidance.  See
http://news.uscourts.gov/judiciary-remain-open-if-government-shuts-down.

The District of Kansas Bankruptcy Court will continue those operations that are part of the exercise of its judicial powers. Accordingly, until further notice, the Court will continue to adjudicatebankruptcy matters.  For example, it will continue to accept new case filings, receive and process pdings and fees, and hear matters.

The Case Management/Electronic Case Files (CM/ECF) system will remain operational to accept electronic filing of documents with the court. Accordingly, parties and their representatives should be prepared to appear for all matters that have been and will be scheduled for hearing (unless continued or cancelled by subsequent order of the Court).  In the short term, the counter and telephone lines for the Bankruptcy Court will remain open for business according to its normal schedule.

Hugh N. Zavadil
Chief Deputy Clerk
U.S. Bankruptcy Court
401 North Market
Wichita, KS 67202

Only One Door Open to Public

Only one entrance at each of the Kansas bankruptcy courts is now open to the public. All other doors at the courthouses are closed and locked to save money on security staffing because of budget cuts as of June 3, 2013.

Kansas Bankruptcy Court – Topeka

Frank Carlson Federal Building, Topeka, KS

All public access to the Frank Carlson Federal Building and U.S. Courthouse will be through the west doors at 444 SE Quincy Street. The PL-2 entrance off Monroe Street will be closed and locked.

Frank Carlson Federal Building
444 S.E. Quincy Topeka, Kansas 66683
(785) 338-5910
Map it [Read more…]

The best way to pay your bankruptcy payment to the Topeka chapter 13 trustee is online or by wage order. Carl Davis Trustee uses TFS Bill Pay for you to send money to the trustee electronically.

This is a service through a third party. It involves a fee for handling the money and there is a short delay for payments to transfer from your account to TFS Bill Pay and on to the trustee.

TFS Bill Pay costs 99 cents for a payment up to $100, which is cheaper than a money order at the local grocery store plus a stamp, not counting your time or gas money. The cost for a payment $101 to $250 is $1.99.

This service is voluntary. You may still pay by wage order or by money order mailed to Carl Davis, PO Box 2818, Wichita, KS 67201-2818. The Topeka drop box has been closed. There is no drop box in Wichita. No payments are accepted in person at the trustee’s office in Wichita. No cash is accepted.

TFS Bill Pay may only be used to pay Carl Dais and trustees in other states who have contacted with the service. The chapter 13 trustees in Kansas City, KS, and Wichita use this service also.

New median income data for bankruptcy cases filed on or after April 1, 2013, has been released by the U.S. Trustee Program.

KANSAS

• 1 earner  $42,577
• 2 people $56,851
• 3 people $65,907
• 4 people $76,402

For cases filed on or after April 1, 2013, add $8,100 for each individual in excess of 4.

Click here to see the median income table.

Click here for information on means testing from the Executive Office of the U.S. Trustee.

The new Kansas exemption law allowing a person to keep one year of earned income tax credit in bankruptcy is constitutional, a third court has ruled. This is good news for lower income working families with children who received EITC and who are struggling to make ends meet.

The Bankruptcy Appellate Panel for the Tenth Circuit affirmed the opinion of Judge Janice Miller Karlin of the Topeka Bankruptcy Court in Williamson v. Westby (In re Westby), BAP No. KS 12-027 (10^th Cir. BAP, Feb. 4, 2013).

Judge Robert E. Nugent also has found the Kansas statute to be constitutional.  His decision in the Wichita Bankruptcy Court has been appealed to the Kansas District Court. Those appeals are pending.

“The issue presented on appeal is whether a recently enacted Kansas statute exempting tax refunds attributable to the earned income credit for bankruptcy debtors is constitutional. The Chapter 7 trustee objected to the debtors’ claimed exemption, arguing the Kansas bankruptcy-only exemption statute violates the Uniformity and Supremacy Clauses of the United States Constitution. The bankruptcy court concluded the exemption statute did not violate these constitutional provisions and overruled the Trustee’s objection. Having reviewed the record and the applicable law, we agree that the Kansas bankruptcy-only exemption statute passes constitutional muster, and therefore AFFIRM the bankruptcy court’s order.” [Read more…]

Hon. Cynthia A. Norton

Congratulations to our friend and colleague, Cynthia Norton, who was sworn in today as U.S. Bankruptcy Judge for the Western District of Missouri. She is pictured here with U.S. District Court Chief Judge Fernando J. Gaitan, Jr., who administered the oath of office to her, and her husband, George Norton.

She will preside over bankruptcy proceedings in Kansas City, St. Joseph, Jefferson City and Springfield, MO. She was appointed to the position by the U.S. Court of Appeals for the Eighth Circuit following the retirement of the Hon. Jerry W. Venters. A public investiture ceremony is planned for April.

After graduating from the University of Kansas Law School in 1984, Judge Norton clerked for Kansas Court of Appeals Judge John E. Rees. Her career in bankruptcy law began as law clerk for the Hon. James A. Pusateri for the Kansas Bankruptcy Court in Topeka 1986-1989. She worked in several Kansas City bankruptcy firms, then formed a boutique bankruptcy firm, Grimes and Rebein, LC, of Lenexa, with her partner, Steve Rebein, in 1996. She practiced law under her professional name, Cynthia Frogley Grimes.

She is a fellow in the American College of Bankruptcy and a recipient of the 2002 Michael R. Roser Award for Excellence in Bankruptcy. She is the 2012 recipient of the Robert L. Gernon Award for Outstanding Service to Continuing Legal Education in Kansas, recognizing her for her frequent presentations to lawyers, law students, clerks and others on bankruptcy law.

We will miss our friend and colleague in the Kansas bankruptcy bar. Congratulations Judge Norton!

Here is a list of where you can go in Topeka for free tax return preparation help.

If you are a debtors in a bankruptcy case, take a copy of the 2012 tax returns, both federal and state, to your bankruptcy attorney.

Refunds should not be spent unless the trustee approves. Talk to your attorney about the tax refunds and who gets what portions of the refunds. Spending tax refunds that are supposed to go to the bankruptcy trustee will get you into serious trouble.

If your refunds get offset by the IRS or the state for taxes, child support, student loans or other government debt, you should get a letter explaining the offset. Take that letter to you bankruptcy attorney.

We are still fighting to keep one year of the earned income tax credit exempt in Kansas. Two Kansas bankruptcy judges have ruled that the new statute is constitutional. Three chapter 7 trustees in Topeka and Wichita have appealed those rulings to higher courts. The appeals are pending. A ruling is expected soon from the Bankruptcy Appellate Panel for the Tenth Circuit U.S. Court of Appeals. Oral argument was December 6, 2012, in Denver.

It will be a little easier for the debtor in bankruptcy when an adjustment in limits and formulas occurs on April 1.  There will be modest increases in the chapter 13 debt limits, in means test formulas and federal exemptions when the once-every-three-year adjustments for inflation go into effect.

These numbers are not an issue for most Kansas debtors.  But a debtor on the margins of these limits and formulas may benefit from waiting to file bankruptcy after April 1.  Your bankruptcy attorney can make sense of these complicated numbers for you.

Erich Fabricius is predicting a 6.3% increase which is slightly less than the increase three years ago when the figures last changed.  Closer to April 1, the government will announce the actual figures that will go into effect.

The unsecured debt limit for chapter 13 bankruptcy is estimated by Fabricius to be $383,175. The current limit is $360,475. A person with debts with no collateral in excess of the limit is ineligible for chapter 13 relief.

The debt limitation for family farmers in Chapter 12 increases from $3,702,650 to $4,031,575.

The homestead equity limit increases from $146,450 to $155,675 though many Kansans have higher homestead limits under state law. Federal exemptions increase but most Kansans do not use the federal exemptions.

Abuse in chapter 7 for excess disposable income will be more difficult for the U.S. Trustee to prove with the new, higher limits on the means test.

Credit: Microsoft Office Clipart