Bankruptcy Chapters

A simple Massachusetts Chapter 7 bankruptcy went amuck recently when an attorney failed to follow the proper procedures in electronic filing.

According to a decision handed down by Judge Hillman last month, In Re: Stallworth (Chapter 7 Case No. 04-017-12) and published recently, Attorney Curtis was a “registered user” of the federal comprehensive electronic case management system (CM/ECF). She was, unfortunately, not too familiar, as she had only filed three total cases, two for Stallworth, and one other.

Apparently Attorney Curtis filed a bankruptcy petition on behalf of Stallworth in September. Often, attorneys file a petition without schedules and other documents: filing an incomplete petition is usually to stop a court action in another court, a foreclosure, for example. And the attorney follows up with the rest of the documents. In fact, in this case, the Court (automatically) responded requesting the missing documents, including the social security number page, the statistical matrix, and the Credit Counseling Certificate. The attorney did not comply and the bankruptcy was dismissed by the Court.

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Tags: Amuck Recently When, Attorney Failed, Proced, Proper Proced

According to the National Bankruptcy Research Center, more than 1.3 million bankruptcies were filed in 2011, or about one for every 175 American adults. We all know the economy is bad, jobs are scarce, and the housing market is still poor. But what may surprise you is what causes an individual to file for bankruptcy protection.

#5: Unexpected Expenses A catastrophic event can push a person to file bankruptcy. You can lose everything to a fire, flood, or a tornado, and an “act of god” can break your finances. Insurance does not always cover everything needed to make a person whole again, and sometimes there are associated expenses not covered by insurance. Likewise, theft can cause you similar harm, including identity theft, fraud, or other stealing.

#4: Divorce A divorce can flat wreck your finances. Legal fees, domestic support obligations, and separate household expenses drain both incomes. Even if you think you are the “big winner” in a divorce, ruining your spouse can cause you unexpected financial grief. Many people are not aware that a family law judge cannot relieve you of a joint debt liability. So even

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Tags: Bankruptcy

The Bankruptcy Code’s requirement that debtors obtain and file both a pre-filing credit counseling certificate and a post filing financial management course certificate have been rightly criticized as ineffective, time consuming and an unnecessary financial burden on people who do not have a lot of extra money.

In my Atlanta area Chapter 13 practice in particular the sentiment I hear expressed most is one of confusion.  The two months between filing and confirmation are filled with phone calls, document production, amendments, payments to the trustee and anxiety waiting to hear if the trustee will withdraw his objections to confirmation.  Once their cases are confirmed, my clients often have little enthusiasm to spend another $50 and another two to three hours attending a financial management course.

Now, there is an additional pre-discharge requirement in the Northern District of Georgia that adds yet another administrative burden on debtors the Section 1328 certificate.

This certificate, which must be signed by the debtor and filed by counsel, asserts under penalty of perjury that the debtor is or is not current with all domestic obligations child support and/or alimony, and that the debtor has or has not received a discharge in a prior bankruptcy case that would make him ineligible for a discharge in this case.

If you are a Chapter 13 debtor and you do not fill out and submit this form, you will not get your Chapter 13 discharge.

In my view, this 1328 certificate obligation is yet another unnecessary and time wasting requirement that unnecessarily increases the cost and complexity of personal bankruptcy.  The statement regarding prior discharges is duplicative of the assertion that every debtor makes when he files his case previous cases filed within the 8 years are already disclosed.  Now, before discharge, we want debtors to promise again that they are eligible for discharge?

As far as the promises regarding child support and alimony the Code already makes these debts non-dischargeable and it appears to me that denying a delinquent non-custodial parent the opportunity to get rid of other debts would make it less likely rather than more likely that child support payments will be made.

It seems that this requirement like so many others in the Code are intended to address issues unrelated to the core issue in bankruptcy can this person pay his debt or not?  Bloating the Code with public policy concerns not related to economics just adds complexity and cost to a system that is already too complicated.

What do you think?  Should Congress use the Bankruptcy Code to further policy goals unrelated to a debtor’s capacity to pay back debt?

The National Association of Consumer Bankruptcy Attorneys (NACBA) is currently lobbying Congress in support of two bills aimed at allowing debtors to discharge private student loans during bankruptcy. Each bill seeks to amend the current federal Bankruptcy Code to allow debtors to discharge student loan debt made by private lenders.  The bills do not affect federal student loans.

Under current law no student loan can be discharged by a bankruptcy court unless there is a finding of undue hardship. The federal courts have interpreted this language very strictly, and very few bankruptcy debtors are able to satisfy the undue hardship standard to discharge student loans.

The NACBA supports changes to the Bankruptcy Code through the Private Student Loan Bankruptcy Fairness Act of 2011, a bill currently pending in the House of Representatives, or via the Fairness for Struggling Students Act, a similar bill in the Senate. Each bill allows a bankruptcy debtor to discharge student loans from private lenders like banks and Sallie Mae.

Outstanding student loans are a terrible burden on many American households and total over $1 trillion.

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Tags: Bankruptcy Attorneys, Loans, Student Loans

When filing for bankruptcy protection in Massachusetts, is it necessary to file jointly if you are married? The simple answer is no.

There is no Massachusetts law or federal bankruptcy rule requiring spouses to file jointly. Often one partner has significant debt and the other doesn’t. If John has sizable credit card debt and Suzie has no debt, and John qualifies, there may be no need to file a joint bankruptcy. This would have an unnecessarily bad result on Suzie’s credit, for no reason. But any credit cards that Suzie did have a legal responsibility for, she would continue to be responsible for, notwithstanding John’s bankruptcy and notwithstanding the fact that John may have been the one charging up the card.

However, it is important to meet with an experienced Massachusetts bankruptcy attorney to determine if you can actually save money, and get more protection, by filing jointly.

It is critical to examine the debts carefully. Often we undertake a bankruptcy for a client and then, sometime later, they reveal that some of the debts were joint and now they cant pay those either. We then have to do a second bankruptcy for the family, resulting in unnecessary time, legal fees and perhaps aggravation.

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Tags: Joint, Joint Bankruptcies