Consumer Bankruptcy Chapter 7

Consumer bankruptcy is a process to reduce or eliminate personal as opposed to business debts. Consumer bankruptcies can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code.  Debtors are... more +
Consumer bankruptcy is a process to reduce or eliminate personal as opposed to business debts. Consumer bankruptcies can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code.  Debtors are eligible for Chapter 7 or Chapter 13 depending on the nature of their debts and assets. less -
News & Analysis as of

How much money can I keep in my checking account when filing bankruptcy?

I'll soon be filing a Chapter 7 bankruptcy. How much money can I keep in my checking account without losing it? Here's the deal. The trustee assigned to your bankruptcy gets to take your property, including money, for the...more

The totem pole in Bankruptcy. Who gets paid first?

Chapter 7 bankruptcies have a hierarchy of creditor claims that is the result of the legislative process. The totem pole was carved with an attempt at fairness and common sense, but naturally has politics painted on it. ...more

Are Inherited IRAs Exempt Property in California Bankruptcy?

The law says that retirement funds are exempt property in bankruptcy, but the Supreme Court has held that this exemption doesn’t apply to inherited IRAs. End of story? Not quite....more

Bankruptcy Beat: Credibility of the Parties is Key Component In Objection To Discharge Proceedings

On June 6, 2014, the United States District Court for the District of Connecticut affirmed the Bankruptcy Court’s (Weil, J.) decision overruling a pro se creditor’s objections to the debtor’s discharge under 11 U.S.C....more

Eleventh Circuit Doubles Down on Lien Stripping

When the Fourth Circuit handed down its opinion in the case of In re Davis, which permitted lien stripping in “Chapter 20” proceedings, the stage was set for the Eleventh Circuit to expand debtor’s ability to escape from...more

Bankruptcy Protection for Inherited IRA

The already complicated subject of how to handle Individual Retirement Accounts following the death of an IRA holder just got a little more complicated with the recent Supreme Court decision in Clark v. Rameker. The issue in...more

Hold That ReFi! A Reason to Think Twice Before Entering Post-Petition Agreements with Discharged Debtors

After months of phone calls, loan modifications and discussions with borrowers, one finally receives the dreaded bankruptcy notice in the mail. A chapter 7, no-asset case, with the loan listed on the bankruptcy schedules as a...more

Supreme Court Holds Inherited IRAs Not Exempt from Bankruptcy Estate

The Bankruptcy Code permits an individual in bankruptcy to exempt from the bankrupt estate “retirement funds” in an individual retirement account (“IRA”) or certain other tax-advantaged vehicles. In a recent case, the U.S....more

The Thing that Wouldn’t Leave. Non-dischargeable Debts in Bankruptcy

One of my favorite old Saturday Night Live sketches was a preview of a mock-horror movie starring John Belushi as an unwanted house guest who was sticking around too long. The name of the movie was The Thing That Wouldn’t...more

Supreme Court Rules Inherited IRAs Available to Creditors in Bankruptcy

On June 12, 2014 the United States Supreme Court issued its opinion in Clark v. Rameker, 13-299, ruling that inherited IRA accounts are available to creditors in bankruptcy. At issue was a Bankruptcy Code provision that...more

U.S. Supreme Court Rules That Inherited IRAs are Available to Pay Creditors

On June 12, 2014, the U.S. Supreme Court issued its opinion in Clark v. Rameker[1], opening up another source of recovery for creditors and Chapter 7 trustees in bankruptcy proceedings. In Clark, a Chapter 7 debtor inherited...more

Fresh Starts in Chapter 7 and Finishing the Race in Chapter 13: Bankruptcy Positives

Many years ago I read an article in the Los Angeles Times that cited a statistic to the effect that nearly all people who filed Bankruptcy, regretted it. Something like 90 percent. I am not sure how that figure was...more

Is the Means Test a mean test? Flunking Chapter 7

Hard to believe that we are closing in on ten years since Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). The most significant impact on consumer bankruptcies was the creation of the...more

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

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

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

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

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

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