The Department of Justice recently adjusted the median income figures, which are effective in bankruptcy cases filed after April 1, 2022. The median income is an important figure, as debtors below that figure are almost always assured a chapter 7 discharge. For...
When Legal Matters Become Personal
Chapter 7
First in, First out accounting – The poker chip analogy
One of the things that comes up in protecting money in a bank account from creditors, is the concept of first in first out. It's a concept that is seemingly difficult, yet also quite simple. The first money that goes in, is the first money that goes out. But you don't...
Supreme Court declines to hear case involving bankruptcy discharge of student loan debt
In bankruptcy, student loans are not dischargeable unless the borrower initiates and can prevail on a separate lawsuit to determine that it would be an undue hardship to pay it back. Courts have interpreted this to be a relatively high standard, virtually impossible...
Why there won’t be another foreclosure stampede like 2009-2010
Foreclosure rates have continued to dwindle since they peaked in 2010. A recent article talked about reasons why there is not likely to be anywhere near the surge that we had experienced during the last recession. There are a few additional reasons that I have...
Veterans Exempt from Means Test
On Friday, the President signed the Honoring American Veterans in Extreme Need Act of 2019, which excludes from the calculation of monthly income, for purposes of the Bankruptcy Code’s means test, certain benefits paid by the Department of Veterans Affairs and the...
Will I lose my wedding ring in bankruptcy?
The quick answer is, I’ve never had a client lose their wedding ring. There are some interesting twists and angles to consider. The first concept to understand is exemptions. The wedding ring is exempt under both the federal and Minnesota exemptions. The federal...
Reaffirming Debts
Reaffirming debts is something that is rarely done in bankruptcy, and almost never needs to be done. Reaffirming should not be confused with simply voluntarily continuing to pay discharged debt, which is what most people do on their secured obligations. That topic was...
Keeping your house (or car) in bankruptcy (Video)
Sometimes people wonder “Do I actually have to file on my house (or my car)?” And the answer is, well, yes, but basically you just gotta keep making the payments. And the way to visualize this, is that before you file bankruptcy, it’s a three way relationship. There’s...
SCOTUS hears arguments in chapter 7 lien strip case
This week the United States Supreme Court heard oral arguments in a case involving stripping off a wholly unsecured junior mortgage in a chapter 7 case. There has been a split amongst the federal circuits, with some permitting it, but most not permitting it. There is...
What should I do first: file my taxes or file bankruptcy?
At the moment you file bankruptcy, your bankruptcy estate is created, and any claim that you have, including a tax refund from last year, and even a pro rata portion of the tax refund that you get next year for this year, is considered property of your bankruptcy...