What happens to bankruptcy debtors who are in a Chapter 13 case, but hit a bump along the road and find that they are no longer able to make their monthly payments to the trustee? In cases like this, a hardship discharge may be available. There are three essential requirements, all found in bankruptcy code […]
Author Archives: doug
Massachusetts debtor nearly loses house in “simple” bankruptcy
An Andover woman nearly lost her $600,000 home when she filed a routine consumer bankruptcy case recently — and her hair-raising adventure highlights one of the biggest traps out there for Massachusetts bankruptcy attorneys. The debtor in the Welch case owned a house worth $608K with a mortgage of $314K on it. She had filed […]
Posted in Real estate
Comments closed
Forgotten but powerful bankruptcy code section helps with tax debts
Recently I was doing some research on the bankruptcy code and it’s controversial section 506, which deals with the deceptively simple concept of an “allowed secured claim,” but has in fact been the source of much bitter litigation in the consumer bankruptcy wars between debtors and creditors over the last twenty years. My eye caught […]
Posted in Taxes
Comments closed
Massachusetts lawyer doesn’t get paid in Chapter 13 bankruptcy
For Massachusetts bankruptcy lawyers, a good example of how not to get paid cropped up recently with a bankruptcy appellate panel at the First Circuit Court of Appeals in Boston. In the Stone case, an attorney sought over $9,000 in attorney fees for representing married debtors in a Chapter 13 proceeding. The appeals court whacked […]
Posted in Chapter 13
Comments closed
New guidance on bankruptcy fees for adversary proceedings
Can a bankruptcy judge force a lawyer to represent a client in an adversary proceeding? Stopping just short of deciding the answer to that question should be “yes,” Massachusetts bankruptcy judge Melvin Hoffman recently suggested that what an attorney can’t do is to refuse to handle adversaries as a matter of course. The Alaya case […]
Posted in Practical tips
Comments closed
A Massachusetts chapter 7 bankruptcy train wreck
From the debtor’s point of view, what would be the worst possible experience to have in a chapter 7 bankruptcy case? Well, how about having the trustee file a lawsuit against the debtor, move (successfully) for an injunction to prevent them from spending except for daily essentials, and then press the court to deny the […]
Posted in Chapter 7
Comments closed
Congress extends tax break for foreclosure victims
As part of the settlement of the various fiscal cliff issues, Congress extended the rules for forgiving the tax consequences of foreclosures for homeowners. Briefly, the tax code treats the forgiveness of debt as income for tax purposes — leaving debtors who have had their debt “forgiven” by a foreclosure sale liable for a whopping […]
Posted in Foreclosure
Comments closed
What happens when a check is outstanding at the time of a bankruptcy filing?
If a debtor files a bankruptcy case after having written checks on a personal account, but before they are cashed who gets to keep the money? This is a question that is being asked in the Henson case before the United States Court of Appeals in the Ninth Circuit, which has jurisdiction over the nation’s […]
Posted in Bankruptcy News, Exemptions
Comments closed
Bankruptcy trustees must return debtor’s funds upon conversion from Chapter 13 to Chapter 7
Bankruptcy lawyers representing debtors with active Chapter 13 cases that might not be doing so well should keep in mind one fundamental truth to Chapter 13 practice: upon conversion of the case to Chapter 7, the debtor (and not the trustee, court, or creditors) is entitled to a return of any funds held by the […]
Posted in Chapter 13, Chapter 7
Comments closed
Disney timeshare not a legitimate expense in Massachusetts Chapter 13
Massachusetts bankruptcy lawyers should take a close look at a recent case decided in Worcester by bankruptcy judge Melvin Hoffman as an example of what will not fly when proposing Chapter 13 plans in this district. The case involved a married couple who owned a Disney timeshare in Orlando (pictured). Their schedules indicated about $6K […]
Posted in Chapter 13
Comments closed