Topeka Debtors Allowed Means Test Deduction for Cars With No Liens

EDITOR UPDATE:  This post is out of date.  Judge Karlin reverted to her original ruling in In re Law after the Pearson decision was vacated.  This issue is currently pending the the U.S. Court for the Tenth Circuit  so we should have a binding ruling soon.  December 13, 2009.

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…]

Involuntary Bankruptcy Filed on Kansas City Mortgage Company

A $49.8 millon creditor of NovaStar Home Mortgage Inc. filed an involuntary bankruptcy petition against the company in Kansas City this week.

The petition was filed January 23, 2008, in the U.S. Bankruptcy Court for the Western District of Missouri at Kansas City.

For more information see the article in the Kansas City Business Journal or the bankruptcy court’s website.

Debtor Audits Stopped (for Now)

The U.S. Trustee has stopped auditing debtors in bankruptcy cases. The Executive Office of the U.S. Trustee says Congress did not fund the budget for the audits in the 2008 appropriations bill. Alternate funding is being sought so the audits can resume, the EOUST reports.

This is good news for debtors whose advocates testified at a Congressional hearing in October 2007 that the audits were abusive to debtors because of overbearing auditors and erroneous reports of material misstatements in the bankruptcy papers.

See my post on the Bankruptcy Law Network for more details and the official statement by the U.S. Trustee.

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