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.