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Nature Of The Debtor This is the chapter 7 bankruptcy case study for Mrs. C., who resides in Wheeling, Illinois. She has come to the office with the simple thought in mind to eliminate her outstanding credit card debt and medical debt. She has been struggling for approximately three years. Although she has been+ Read More
The post Case Study For Mrs. C. From Wheeling, Illinois appeared first on David M. Siegel.
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Citation:
No. 16-4000 (D.C. No. 2:05-CV-00555-TC)
Ruling:
Appeal dismissed for lack of standing.
Judge(s):
HOLMES, BALDOCK, and MORITZ,
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Citation:
In re Castellino Villas, A.K.F. LLC, No. 12-57186 (9th Cir. Sep. 6, 2016). Published.
Ruling:
A chapter 11 debtor that continues after plan confirmation to defend a creditor’s prepetition lien-enforcement action has not “returned to the fray,” and the creditor’s postpetition attorney-fee claim is discharged.
Judge(s):
Michael J. Melloy, Senior Circuit Judge for the Eighth Circuit Court of Appeals, and Jay S. Bybee and Sandra S. Ikuta, Ninth Circuit Judges. Opinion by Judge Ikuta.
When someone is looking to file chapter 13 bankruptcy, they obviously want to pay back as little as possible. They also want to gain the greatest amount of relief during the process. There are a number of factors that go into determining whether or not the monthly payment is going to be high, low, or+ Read More
The post Paying Back As Little As Possible Under Chapter 13 appeared first on David M. Siegel.
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Citation:
--- F.3d ---, Case No. 15-51045 (5th Cir. 2016)
Ruling:
AFFIRMED lower courts' rulings that state court judgment and sanctions were non-dischargeable under 11 U.S.C. 523(a)(2)(A) & (a)(6). Court of appeals rejected all grounds raised by the debtor, including the ground that the state court sanctions order was insufficient ...
Judge(s):
Stewart, Clement, Haynes
Why Filing Bankruptcy Stops Payroll Garnishment: Virginia Law, Virginia Form I’m surprised a couple times each month by Virginia employers who don’t know that bankrutpcy stops payroll garnishment. Some employers think they need to keep on garnishing, until they get an order from a judge saying to stop. But if the read the Garnishee’s Answer Form, […]The post Why Filing Bankruptcy Stops Payroll Garnishment: Virginia Law by Robert Weed appeared first on Robert Weed.
Here at Shenwick & Associates, we've written extensively about the "means test," which is a complex series of calculations based on household size and income to determine if a debtor is eligible to file for Chapter 7 bankruptcy. However, the means test only applies to individuals whose debts are primarily "consumer debts," as opposed to business debts, pursuant to § 707 of the Bankruptcy Code. Congress did not define the word "primarily," but most courts have defined the word to mean more than half. If more than 50% of the debtor's debts are non-consumer debts or business debts, the debtor is automatically eligible to file for Chapter 7 bankruptcy without doing the means test, and the presumption of abuse does not apply.
What are consumer debts? Section 101(8) of the Bankruptcy Code defines a consumer debt as "debt incurred by an individual primarily for a personal, family, or household purpose." Many bankruptcy courts have developed a "profit motive" test. If the debt was incurred with an eye towards making a profit, then the debt should be classified as business debt. Accordingly, a mortgage on an individual's home would be considered consumer debt; however, if a vacation home were purchased for investment purposes and rented out, then the mortgage would qualify as business debt. If an individual uses credit cards for consumer purchases, then those debts are consumer debts; however, if an individual used the credit card for business purposes, then in all likelihood that debt would be deemed business debt. If an individual guaranteed a debt for a business obligation, that personal guaranty would be deemed business debt, as would the investment losses.
- Less than 50% of total scheduled debt was incurred for personal, household or family purposes.
- Purpose of debt is judged at the time the debt was incurred.
- Home mortgages are typically consumer debt.
- Most tax debts are not typically consumer debt.
However, with respect to tax debts, a number of bankruptcy courts outside the Second Circuit have held that those debts are business debts. See In re Brashers, 216 B.R. 59 (Bankr. N.D. Okla. 1998), which holds that the debtor's income tax obligations do not constitute consumer debt; see alsoInternal Revenue Service v. Westberry (In re Westberry), 215 F.3d 589 (6th Cir. 2000), which also holds that taxes are not consumer debt. Many subsequent courts examining this issue have followed the Westberry analysis.
For all of your questions regarding debts, whether they be credit card, medical, consumer, business, taxes, secured or unsecured, please contact Jim Shenwick.
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Citation:
Rajala v. Garnder, et al., Case No. 14-3241 (10th Cir. August 31, 2016). Unpublished
Ruling:
The scope of § 541 is broad and should be generously construed, and that an interest may be property of the estate even if it is novel or contingent and every conceivable interest of the debtor, future, nonpossessory, contingent, speculative, ...
Judge(s):
Gorsuch, Ebel, Bacharach
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Citation:
Rindlesbach v. Jones, et al. (In re Rindlesbach), Case No. 15-4088 (10th Cir. August 30, 2016). Unpublished
Ruling:
A person must be aggrieved by a bankruptcy court order to be able to seek appellate review of that order and to be aggrieved, that person’s rights or interests must be directly and adversely affected pecuniarily by the decree or ...
Judge(s):
Hartz, O’Brien, Phillips
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Citation:
No. 15-2622, 3d Cir. Aug. 29, 2016
Ruling:
Section 303(i) of the Bankruptcy Code allows a former debtor to seek costs, attorneys' fees, and damages against a petitioning creditor, where a court dismisses an involuntary bankruptcy petition. The United States Court of Appeals for the Third Circuit ...
Judge(s):
AMBRO, JORDAN and SCIRICA, Circuit Judges
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