All posts in Chapter 13

Ransom – My ABA summary of the Supreme Court case

I forgot about this summary I wrote for the ABA on the Ransom case at the Supreme Court.


From Kathy Dockery Staff Atty Aki re Chapter 13 payments


Best Practice Advice

If your client is making a plan payment within 5 days of a confirmation hearing date, please have them purchase a cashier’s check or money order instead of making the payment electronically via TFS. The TFS payments take about 3-5 days to process and the delay is causing an increase in conditionally continued or confirmed matters and even causing dismissal of cases.

An alternate strategy for making sure your client’s plan payments are made timely is to set up your client in TFS with a plan payment due date that is 7 days prior to the legal due date. This way, the posting delay will not be an issue.

For electronic payment evidence to be sufficient with this office, the payment must be in the status row which is titled “Processing Transactions”. An electronic payment which is in the status row for “Upcoming Transactions” is not sufficient.

Thank you.

ABI Commission Report on Consumer Bk

The ABI Commission just released the report on consumer bankruptcy.  You can find the summary of findings by clicking here.

Some interesting recommendations:  allow for postpetition chapter 7 attorneys fees, get rid of both credit counseling courses for a chapter 7, and increase chapter 13 debt limit to $3 million and eliminate the secured / unsecured distinction.    Interesting stuff in the full report which can be retrieved by registering your email here.  Curious what they will do with your email….

Adjusted Dollar Values – April 1, 2019

I am posting this because I always have a hard time finding the adjusted dollar values. I admit, I stole this from the Eastern District. You can find it by clicking here, and I have pasted a few choice numbers for convenience:

Debt limits for Chapter 13 cases: unsecured, $419,275; secured $1,257,850.

Wages entitled to priority: $13,650.

Definition of a small business: $2,725,625.

Definition of assisted person: $204,425.

Plan Payments Memo from Kathy Dockery Office

Email from Aki Koyama, Staff atty to Chapter 13 trustee Kathy Dockery

Hello Colleagues:

We are having a couple of issues with the evidence provided for electronic plan payments.

Issue No. 1
Scheduling Electronic Payments: Read more…

Subtle Difference Between “Deemed Exempt” versus “Claimed Exempt” — Just Because Schedule C Lists the $100 in Bank Account Does Not Mean Debtor Can Immediately Use It

I tried to make the title as concise as possible — Ockham’s Razor failed.

Client comes to see you and they have $5,000 in their checking account.  You list it on Schedule B then exempt it on Schedule C and file the case.  The 341(a) is in 30 days.  Client goes to the bank the next day and withdraws all of the funds to pay rent and spend it on gambling.  You don’t think it is a problem because the funds have been fully exempt.

But is it?

In Section 70a of the former Bankruptcy Act, there was an automatic exclusion of exempt property such that by simply listing the asset on Schedule C — then that asset was automatically and immediately exempt.  That is not how it works under the current Code — it is not automatic.  I was reading the Mwangi case from the Ninth Circuit that clarifies a subtle distinction between an asset that has been “claimed exempt” versus one that is actually “deemed exempt.“   In the hypo above, it is a “no harm, no foul” situation but it’s still worth thinking about.

Read more…

New Barash Ch. 13 Confirmation Hearing Procedures

I am advised that Judge Martin Barash has some updated local rules on getting your chapter 13 plan confirmed in his courtroom.  You can find the rules here.   Judge Barash states:

“These procedures are intended to increase the efficiency of chapter 13 plan confirmation hearings, reduce the amount of court time attorneys spend at these hearings, and discourage counsel from filing chapter 13 plans and delivering documents requested by the chapter 13 trustee shortly before the confirmation hearing.”

A summary is as follows:

1.  Attorneys who don’t check in by 9:55 am will be put on second call.

2.  Matters will be called in order of check in and once the attorney is at the podium, all of his or her matters will be heard together.

3.  Where a plan has been filed within 7 days of the confirmation hearing, or documents provided to the trustee within 14 days (i.e., late), the case will be “dropped to the bottom of the calendar” which does not mean that it is okay to file things late.

4.  Attorneys will not be allowed to give the trustee plan payments or documents during the hearing (meaning from the podium).

Wife Files Bk But Title To House In Non-Debtor Husband’s Name – “Brace” Yourself!

“I’m not on title, only my husband is on title!” — wow, how many times a week do I hear this statement re: a house, a car, a boat, etc.

In last year’s BAP opinion of In re Brace by Judge Lafferty, the panel clarified an interesting fight:  who wins between Community Property Presumption (CFC 760) versus Record Title Presumption (CEC 662).  I enjoy reading Judge Lafferty’s opinions — it’s very tutorial and easy to follow.  In this opinion, the panel held that the community property presumption wins.  This means, to me, that it does not matter if debtor is “not on title” to the house — the house is still property of the estate due to debtor’s community interest in the house.   This case is on appeal to the Ninth.

Butner Principle From a Different Perspective – Simon Says May I?

I was reading this law review article on the Butner case and it provided a different view on the case that I wanted to share.  In essence,  Professor Adler questions why Butner  became so famous and a “guiding principle” when the underlying arguments and holdings are so obvious.   Butner says that since the Bankruptcy Code does not establish or define property rights, the parties must turn to nonapplicable law (state law) to answer it.  Well of course! Where else would you turn to!? That makes so much sense, why did we need nine Justices to clarify that?

This is akin to me telling you “in order to fix my plumbing problem, don’t look in the ‘House Operations Manual’ but instead look at the plumbing manual that will tell you how to fix my plumbing problem.“  We need a Supreme Court to tell us that?  The answer is so blatantly obvious let alone to become a “guiding principle!” Read more…

Client Purchased Rolex Before BK? How Courts View “Fraudulent Intent” For Credit Card Fraud

I was reading some case law on fraudulent purchases prior to bankruptcy.  At first I thought it was only “luxury” purchases (i.e. you purchase a Rolex on eve of bankruptcy) but it turns out that “luxury purchase” is just one of many factors.  If you go to McDonald’s everyday and rack up a debt there, that can be nondischargeable.

I read Dougherty and HashemiConsider these factors when advising your client: Read more…