Category Archives: Bankruptcy News

In bankruptcy court, what exactly is a consumer debt?

Since 2005, persons who wish to file a Chapter 7 bankruptcy case need to qualify first, passing a means test that compares their recent income to the average income and expenses in the area where they live. This means test applies to all Chapter 7 cases of individuals that involve primarily consumer debts. This begs […]

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Working for a marijuana business could cost you your right to file bankruptcy

Since the rise of marijuana legalization in various parts of the United States, it has been universally held that newly minted “pot shops,” should they fall on hard times or go out of business, cannot seek corporate bankruptcy relief. Bankruptcy court is federal court, and federal courts reading federal laws still consider cannabis to be […]

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Median income figures for bankruptcy means test were revised in 2020

The United States Trustee has issued an increase in the median family income used for completing Bankruptcy Forms 122A-1 and 122C-1. The increase is based on consumer price index adjustments and is effective as of today, April 1, 2020. The new table is available here. Median income is used to determine eligibility for Chapter 7 […]

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Interim bankruptcy rules on the books in Massachusetts

The bankruptcy judges in Massachusetts adopted the second set of changes to bankruptcy procedure rules this year, effective April 27, 2020. The compete set of rule changes can be read here. A bit of background: The creation of a new Small Business Reorganization Act in August, 2019 spurred a need for many small changes to […]

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Can a state file for bankruptcy?

With tensions over corona virus and the financial meltdown left in its wake approaching the boiling point, on April 22, 2020 Senate majority leader Mitch McConnell (R-Ky.) appeared ready to ditch the idea of bailing out strapped state governments, suggesting that the states might be better off filing bankruptcy cases instead. This in turn brought […]

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Massachusetts adds local rules to implement new small business bankruptcy cases

The Small Business Reorganization Act took effect in February of 2020, adding a streamlined Chapter 11 bankruptcy process for businesses with less than $7M in debt, and in April the bankruptcy court in Massachusetts issued some new local rules for handling these cases. Local rule 1002 -1 implements the requirement that the judge assigned to […]

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Americans are asking for mortgage forbearances, but should be wary of the consequences

Three weeks after the passage of the CARES Act, so far the main response of the federal government to the corona virus quarantines, almost three million Americans had signed up to skip their mortgage payments under the act’s forbearance program. That amounts to about 5.5% of American homeowners and $651 billion in missed payments according […]

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Controversy swirls over creditors ability to snatch stimulus checks

The possibility of Covid-19 stimulus checks — $1,200 for most Americans — ending up in the pockets of banks and bill collectors instead keeps popping up in the headlines, with much of the reporting driven by David Dayen of the American Prospect e-zine. Dayen has posted that Treasury Secretary Steven Mnuchin was aware a technical […]

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Bankruptcy lawyers should not try to scare debtors into filing cases

As the federal government gets ready to start sending stimulus payments to millions of Americans in mid-April of 2020, this office has become aware of a mini-movement among a group of bankruptcy attorneys looking to frighten debtors (i.e. their potential clients) into worrying about the payments being scooped up by debt collectors seeking so-called “garnishments.” […]

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Massive mortgage bailout bill comes with some catches

Homeowners who are struggling with their finances while “stay-at-home” orders are in effect and shut downs affect most businesses got some relief in late March of 2020 when the CARES Act was signed in to law. The $2 trillion dollar bailout package, designed to float the economy while the United Staes battles an unseen enemy, […]

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