Tuesday, November 08, 2005

New Upstate Judge

According to today's The State newspaper:

"Columbia native now a bankruptcy judge

GREENVILLE — Helen Elizabeth Burris has been named a bankruptcy judge in the Upstate, according to a news release from William W. Wilkins, chief judge of the U.S. Court of Appeals in South Carolina.

Burris currently is a Chapter 13 trustee in Greenville. She will be stationed permanently in the Upstate, with offices and a courtroom in Spartanburg.

Burris is a Columbia native who earned a bachelor’s degree from Appalachian State and a law degree from the University of North Carolina."


Tuesday, October 18, 2005

Attorney's not Debt Relief Agencies

And it begins. According to an order entered October 17, 2005 at 9:35 am in the Southern District of Georgia's Bankruptcy Court(In Re: Attorneys at Law and Debt Relief Agencies), Attorney's are not Debt Relief Agencies and are not cevered by the requirements set out for them.

Sunday, October 16, 2005

Last Call for Bankruptcy...

...Not really, but only few hours left to file under the current law. I'm sure every attorney who practices BK laws has been as busy as our office this week. From a couple of newspaper articles put the number of new cases filed YTD is about 20% over the same time last year. A bankruptcy assistant at another firm commented that we should get t-shirts made up with "I survived the Bankruptcy Reform Act of 2005". I don't know about other firms, but, we have continued to meet with potential clients and advise them about filing under the new law, and we have our first person set to hire us at 8:00 am Monday morning. We actually have about 20 people scheduled to hire us over the next two weeks, so there is still demand out there for bankruptcies after today.

In most cases, 85-90% of people will be able to file the same chapters of bankruptcy that they would have under the current law, and the disposable income test actually leads to lower chapter 13 plan payments when disposable income is the main issue (i.e. very little equity). I think the toughest issues are going to be chapter 7 debtors over the median, chapter 7 debtors who either pass the means test, or are under the median, but have trouble making "I&J" work(income and expenses). The other major issue is going to trying to comply with the Courts requirement of providing 6 months worth of pay stubs. Most of these people ( and me included) would be hard pressed to come up with 1-2 weeks worth. The code mandates 60 days worth ending at the end of the month prior to the filing, that is not easy, but it is reasonable. Generally about 60 days elapses between first meeting a potential client and the filing of the case, so we can have them keep all of them during that time. But, emergency peitions filed on the eve of a forclosure will become very rare.

For debtors over the median we will be charging significantly higher fees in both CH7 & CH13. Since the Means test/Disposable income test must be filed with the petition a great deal of information and supporting documents will be needed to even complete these tests. As a matter of fact, you almost need to have a complete set of schedules and statements completed before you even start to calculate the tests. Then we can expect to spend some amount of time, probably the next 6 months agruing with trustees, creditors, and the UST about what is an acceptable "Necessary Expense". Depending on the complexity of the case this may add an additional $500-$1,000 to a case. For example; A maried couple with only one spouse filing, the filing spouse has a regular job and a side business that he runs, also some investments that provide some income, the non-filing spouse has regular income, child support, and sells stuff on e-bay. Just trying to determine the average monthly income will take time, then trying to determine the amount of the non-filing spouses income that is not contributed to the household income.... and that's just the first page (of four). Very costly.

Friday, October 07, 2005

Update to Court website

Another quick note. The Bankruptcy Court has added a page to its website for imformation and links regarding the refom act.

**Also, sorry it has been so quiet around here, just the opposite in the office, too many cases and too little time for anything else.

Rules and Forms

New interim rules and forms have been published by the Advisory Committee. Changes to both the Chapter 7 and Chapter 13 Means test/disposable income tests have been made. Minor changes over all, but at least it is now possible to account for cell phones and internet expenses, as long as they are "for the health and welfare of the debtor or dependents".

Tuesday, September 20, 2005

Credit Counseling Agencies

The US Trustee's Office has put out the list of approved credit counseling agencies.

Friday, September 02, 2005

Better off under new Code?

In some cases, yes. If you have a potential client come into your office within the next few weeks you had better know when it would be more advantageous for them to file after October 16. What! you say. I believe so. If you have someone in front of you that will obviously be a chapter 13 client either now or later you may be doing them a disservice by advising them to file now. It may be a narrow group who would be treated better, but I think it is worth the effort to check. If someone has disposable income, and will be doing a 13 anyways, you need to look at the disposable income calculations under the new code versus current law. Under current law 401(k) loan repayment does not count against disposable income, under the BAPCPA it does. So, if this persons ch13 repayment will be based on disposable income alone (or primarily) that $700/month repayment which is currently still part of disposable income, is not anymore. It is a recognized monthly expense under the Reform Act. What about child support and Social Security payments for dependents? Same story there. It might be worth a look to see how your client would fare under each version...

Monday, August 29, 2005

Bankruptcy Means Testing

Best Case has released a beta (test) version of the chapter 7 means test. It is based on the original form release a few weeks ago. This form has been, and will continue to be revised but the calculator looks good for a beta. The main issue, as you will find once you work with this, is what can we fit into the "Other Necessary Expenses" areas. This is only the chapter 7 version, the disposable income/chapter 13 version is not out yet, but this is a good start to try running numbers for those who have not tried on their own.