Chapter 7

News & Analysis as of

Retirement Plans Are Your Saving Grace in Bankruptcy

Why do I say retirement plans are your saving grace in bankruptcy? Because you can (almost always) keep all of the money in them if you file bankruptcy, not losing it to your creditors. Let's look as what that means for you....more

SCOTUS Denies Certiorari In Lien Stripping Case

On March 31, the U.S. Supreme Court denied a petition for a writ of certiorari in an Eleventh Circuit case that raises the issue of whether, under section 506(d) of the Bankruptcy Code, a chapter 7 debtor can “strip off” a...more

Eighth Circuit Applies Subsequent New Value Defense To Payments Received From Third Party Creditor

The Eighth Circuit held that preferential payments are subject to a new value defense of § 547(c)(4) where the new value was provided by a third party that benefitted from the preferential transfers....more

Bad Faith Constitutes "Cause" For Dismissal Under Section 707(a)

Until recently, the creditor of a chapter 7 debtor whose debts were not primarily consumer in nature was unable to rely on Eleventh Circuit precedent to support its position that its debtor's chapter 7 bankruptcy case should...more

Social Security Income and its Impact on Filing for Chapter 7 Bankruptcy Protection

Many social security income (SSI) recipients question whether or not their monthly SSI will keep them from being able to file for Ch. 7 bankruptcy. The answer, as with most bankruptcy filings, will depend on each specific...more

Supreme Court Issues Decision in Law v. Siegel, Eliminating Ability to Impose Surcharge on Exempt Property Unless Explicitly...

On March 4, 2014, the Supreme Court issued a unanimous opinion in Law v. Seigel, Case No. 12-5196, 571 U.S. ___ (2014) holding that the bankruptcy court used its equitable powers in contravention of Bankruptcy Code section...more

Bankruptcy: Preference Defendants Don’t Feel “Preferred”

This year, many unsuspecting businesses will be hauled into court by a trustee seeking return of a “preferential” payment made by a party now in bankruptcy. To those uninitiated, a bankruptcy trustee’s power to “avoid” or...more

U.S. Supreme Court Reins in Bankruptcy Court Authority Under § 105(a)

On March 4, 2014, the United States Supreme Court issued its decision in Law v. Siegel, 571 U.S. __ (Mar. 4, 2014) and held that the bankruptcy court exceeded its authority under section 105(a) of the Bankruptcy Code and its...more

Can I File for Chapter 13 Bankruptcy Even if I Qualify for Chapter 7?

Some individuals pass the means test for Chapter 7 bankruptcy. Yet they also have income that might allow them to repay their creditors under more favorable terms. This option might be preferable to individuals who wish to...more

Not All Property Acquired Post-Petition is Safe from Creditors

Although property obtained by a debtor after filing for bankruptcy is usually safe from creditors, a recent case from the Ninth Circuit Bankruptcy Appellate Panel allowed a Chapter 7 Trustee to sell real property obtained by...more

OCC Issues Guidance Regarding Secured Consumer Debt Discharged In Bankruptcy

On February 14, the OCC issued Bulletin 2014-02, which clarifies supervisory expectations for national banks and federal savings associations regarding secured consumer debt discharged in Chapter 7 bankruptcy proceedings. The...more

Should you avoid bankruptcy?

For many people, bankruptcy is something to be avoided at (almost) all costs. Is that a good policy for you to follow? Let's take a look....more

Closing the Chapter 7 Loophole for High Income Debtors

Heralded by debtor’s attorneys as “a wonderful loophole”1 in the Bankruptcy Code, a debtor who has primarily business, rather than consumer, debts can qualify for a speedy Chapter 7 discharge despite a high earning capacity...more

Paying Attorney’s Fees Not Reason to File Chapter 13

Of the three most common chapters of the Bankruptcy Code, Chapter 7 offers an insolvent individual the freshest of starts; yet it is not without its pitfalls. Under Chapter 7 a debtor is not permitted to pay his attorney in...more

I filed bankruptcy but forgot to list a debt I owe!

If you filed a Chapter 7 bankruptcy, the one that gets rid of your debts quickly, but forgot to list a debt you owe, what happens? Will you have to pay that debt? Let's take a look...more

What Property Can I Keep in a Chapter 7 Bankruptcy?

Although the basic concept of Chapter 7 bankruptcy involves liquidating assets to repay creditors, the law is not intended to leave individuals or businesses without any assets. This is why filers can exempt certain assets...more

Caveat Debtor: Disgorging Inheritance in Chapter 13 Cases

A recent case out of the 9th Circuit, In re Dale, revives a controversial subject for Chapter 13 debtors: whether an inheritance received more than 180 days after commencement of the case is part of the bankruptcy estate. ...more

Common Causes of Bankruptcy

Personal bankruptcy can become necessary for a variety of reasons. People who have not gone through it often wrongfully assume that bankruptcy is always the result of overspending and financial mismanagement. However, the...more

The Big “B” – Bankruptcy on the Construction Project

It’s not often that I find myself in bankruptcy court, but there I was. A lone construction attorney surrounded by bankruptcy lawyers speaking in a foreign tongue – “cram down!,” “cash collateral!,” “executory...more

Specialized Forms of Bankruptcy in Georgia

The three most common types of bankruptcy — Chapter 7, Chapter 13 and Chapter 11 — account for nearly all business and personal bankruptcy filings in Georgia and the rest of the United States. There are also several other...more

Northern District of New York Bankruptcy Court Rules On Issue of First Impression Concerning Lien Stripping in A Chapter 7 Case

“Lien stripping” often takes two forms. A debtor’s attempt to void the unsecured portion of a lien when there is some but not enough equity in collateral to fully cover a lienholder’s entire debt is commonly referred to as a...more

Right Or Wrong, Dewsnup Is Law

A Chapter 13 debtor sought to void a federal tax lien under Section 506(d) of the Bankruptcy Code to the extent that it exceeded the value of his assets. The Seventh Circuit joined the Tenth Circuit in holding that the U.S....more

Need Bankruptcy Quickly? We Can Do That.

Let’s face it. No one wants to file for bankruptcy. Even though many times bankruptcy is the solution we need, we put it off until one day we get hit with a wage garnishment, a debt collection lawsuit, a bank levy, or even...more

What if Your Income Is Too High for Chapter 7 but Your Debt Is Too High for Chapter 13?

For individual debtors, Chapter 7 and Chapter 13 are the most common personal bankruptcy filings in Georgia and likely in every other state as well. Both types have certain eligibility requirements, and in some cases, people...more

Wait until you're sued to file bankruptcy, or file earlier?

Many people wait until they're sued by a creditor to file bankruptcy. After all, filing bankruptcy stops all creditor actions against you, including lawsuits. But if your financial life is "going South", should you wait that...more

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