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Written by: Robert DeMarco
United States Bankruptcy Laws – The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) (Pub.L. 109–8, 119 Stat. 23, enacted April 20, 2005) was actually first drafted in 1997 and was passed by the 109th United States Congress on April 14, 2005 and signed into law by President George W. Bush on April 20, 2005..  The House of Representatives approved a version titled the “Bankruptcy Reform Act of 1999” and the Senate approved a slightly different version in 2000.  After reconciliation, Congress passed the “Bankruptcy Reform Act of 2000”, but President Clinton, vetoed the bill by waiting for the “lame-duck Congress” to adjourn without signing it.  The bankruptcy bill was subsequently re-introduced in each successive Congress, but was continuously shelved due to significant opposition and threats of a filibuster.  Things changed in 2004 as the Republicans took control of both the Senate and the House of Representatives.  The revised bankruptcy bill was introduced by the chairman of the Senate Finance Committee, Republican Senator Chuck Grassley of Iowa and was supported by President George W. Bush. The bill passed by large margins:  302-126 in the House; and 74-25 in the Senate.  The Bill was later signed by President Bush.
BAPCPA made several significant changes to the Bankruptcy Reform Act of 1978. Some of the more significant change BAPCPA made to the Bankruptcy Reform Act of 1978 are as follows:
Means Testing:  BAPCPA implemented a process of means testing in an effort to limit access to the bankruptcy process.  The means testing focuses primarily upon a variety of budget issues such as income, household expenses, car payments, house payments and the like.  However, the means test is not based entirely upon reality.  The means test allows for the prospective debtor to make use of certain actual expenses (i.e. mortgage payments), but otherwise requires the use of standardized expenses (i.e. vehicle maintenance).  Depending upon the results of the means test there could arise a presumption of abuse which must be rebutted if the bankruptcy is to proceed.
Automatic Stay:  The automatic stay provisions of the Bankruptcy Reform Act of 1978 were modified significantly by BAPCPA.  There is now a presumption that repeat filings constitute bad faith and require the party seeking to impose the stay (usually the debtor) to rebut the presumption by clear and convincing evidence.  BAPCPA also limited the applicability of the automatic stay in eviction proceedings.
Credit Counseling:  BAPCPA also requires that all individual debtors (chapter 7, 11, or 13) complete a credit counseling course as a condition precedent to filing bankruptcy.  Further, chapter 7 and 13 debtors must, as a condition to obtaining a discharge, complete an instructional course concerning personal financial management.  11 U.S.C. §§ 727(a)(11); 1328(g)(1).
Discharge:  BAPCPA also provided more protections to creditors because it expanded the exceptions to discharge. The presumption of fraud in the use of credit cards was expanded.  BAPCPA amended § 523(a)(8) to broaden the types of educational (“student”) loans that cannot be discharged in bankruptcy absent proof of “undue hardship.” The nature of the lender is no longer relevant.  Thus, even loans from “for-profit” or “non-governmental” entities are not dischargeable.
Moreover, the Chapter 13 “super-discharge” that was available under the 1978 Bankruptcy Code is greatly reduced under BAPCPA.  As such, BAPCPA no excepts from discharge in a chapter 13 most tax obligations and debts stemming from fraud and false statements; unscheduled debt; obligations stemming from defalcation by a fiduciary; domestic support obligations; student loans; damage claims stemming from drunk driving injuries; criminal restitution and fines; and damages rewarded for willful or malicious personal actions causing personal injury or death.
Exemptions:  BAPCPA made significant changes to the exemption provisions that existed in the Bankruptcy Reform Act of 1978.  One purpose in doing so was to prevent prospective debtors from forum shopping.  Exemptions define the amount of property a debtor may protect from levy and garnishment.  Typically, every state has exemption laws that define the amount of property that can be protected from creditor collection action within the state, and as one can imagine each state’s exemption laws differ. Further, there is, depending on the state, a federal exemption statute that that might be used in bankruptcy cases.
Under BAPCPA, a debtor who has moved from one state to another within two years of filing (730 days) the bankruptcy case must use the exemption laws from the place of the debtor’s domicile for the majority of the 180 day time period preceding the two years (730 days) before the filing [11 U.S.C. § 522(b)(3)]. If the new residency requirement would render the debtor ineligible for any exemption, then the debtor can choose the federal exemptions.
BAPCPA also, implemented a “cap” on homestead exemptions.  Where the prospective debtor, within 1215 days (about 3 years and 4 months) preceding the bankruptcy case added value to the homestead  in excess of $125,000 that value cannot be exempted. The only exception is if the value was transferred from another homestead within the same state or if the homestead is the principal residence of a family farmer [11 U.S.C. § 522(p)].  This “cap” would apply in situations where a debtor has purchased a new homestead in a different state, or where the debtor has increased the value to his/her homestead (presumably through improvements or paying down the mortgage).
Thus is the terse and convoluted history of American Bankruptcy Law. While it might not be the most glamorous of tales to tell, it was critical to the development of trade and commerce in the western world. “The power of establishing uniform laws of bankruptcy is so intimately connected with the regulation of commerce, and will prevent so many frauds, where the parties or their property may lie, or be removed into different states, that the expediency of it seems not likely to be drawn in question.” Madison, James, The Federalist No. 42, The Powers Conferred by the Constitution Further Considered (Tuesday, January 22, 1788).
DATED:  July 11, 2013
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Here is what to expect when you first meet a chapter 7 bankruptcy attorney:     

I, like most Fresno attorneys, do not charge for the first consultation.  If you contacted an attorney that wants to charge right away, try someone else first.  Remember, your chief goal is to determine whether you should file bankruptcy.  It's also important to feel comfortable with the attorney.  Trust your instincts.  There are a lot of attorneys that file Chapter 7 bankruptcies in Central California. 

The first meeting can last anywhere from 30 minutes to 90 minutes.  The attorney's goal should be to explain the bankruptcy process and determine whether bankruptcy is the best solution.  

This first meeting will broadly the bankruptcy process.  You should have all your questions answered.  The attorney should have a broad understanding your personal finances.  These topics include your assets, income, and expenses.  At the end, you should feel more comfortable deciding whether you want to file bankruptcy.  You should be quoted a price to file bankruptcy.  I typically charge between $1200 and $1500 per bankruptcy.  The Eastern District of California Bankruptcy Court charges $306.  There are two online bankruptcy classes that cost as low as $35. 

It is helpful to bring copies of the following documents: 

1.  Driver License

2.  Social Security Card 
3.  Last two years of filed tax returns 
4. Last six months income stubs.  (Pay stubs, unemployment, disability, etc.)  5.  Lawsuits, garnishments, foreclosures, abstract of judgments or tax liens.
6. Retirement statements (Your most recent 401k, PERS, STRS, and/or pension statements
7. Title certificates to all cars, trailers, Boats, etc.  8. Most recent invoice statements to vehicles and real property

9. Life insurance policies.

10. Credit report from www.annualcreditreport.com (the free report)

11. If you are required to pay child support or alimony, than provide Marriage Agreement and court order.

12.  License of professionals, e.g. sales agent, truck driver, attorney.   

Ken Jorgensen, California Attorneywww.fresnobankruptcylawgroup.com

By John Clark
After more than two years of legal wrangling, pop star Toni Braxton has reportedly reached a deal to wrap up her bankruptcy filing, according to the San Francisco Chronicle.
Braxton originally filed for bankruptcy in 2010, claiming that she owed tens of millions of dollars to creditors, but it appears her long debt relief journey may be coming to an end.
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Toni Braxton Reaches Deal to Leave Bankruptcy Court
According to reports, Braxton has reached a tentative deal with the bankruptcy trustee to end her Chapter 7 bankruptcy case, which ended up costing her roughly $150,000 (although it may have allowed her to escape from millions of dollars in debt).
Sources say Braxton also reached a deal a few months ago with the bankruptcy trustee to buy some of the personal property she lost in the Chapter 7 case.
Braxton reportedly paid $5,000 a month for a little more than a year for the right to repurchase some of her own assets, sources indicate.
But Braxton and the trustee had also tussled for several months over the $754,000 Braxton was paid for performing in other countries after she filed for bankruptcy.
The trustee believed that creditors were entitled to some of this money, but Braxton said she should be able to keep the funds because they were earned after she went to bankruptcy court.
In response, the trustee noted that the money was placed into an escrow account before Braxton filed for bankruptcy, and that this meant the court was entitled to take the funds.
Eventually, the parties reportedly came to a compromise. Braxton agreed to pay $150,000 to the trustee, and the trustee agreed to allow Braxton to buy the rights to several of her songs for $20,000, according to reports.
Bankruptcy Case is Second Filing for Legendary Singer
Sources note that the agreement between Braxton and the trustee must still be approved by a Chapter 7 bankruptcy judge, but this may be little more than a formality, predict sources.
And thus ends the singer’s second trip to bankruptcy court. According to reports, Braxton first filed for bankruptcy in 1998.
In the fifteen years since that filing, Braxton has seen her share of financial troubles. In addition to owing several millions dollars to many different creditors, she also owes $396,000 in tax debt to the Internal Revenue Service. But the bankruptcy may allow her to find funds to repay the government.

Written by: Robert DeMarco
United States Bankruptcy Laws – The Chandler Act and the Bankruptcy Reform Act of 1978
The Bankruptcy Act of 1891, while amended from time to time, was not substantially revised until the passage of the Chandler Act of 1938. The Chandler Act replaced § 77B of the Bankruptcy Act of 1898 with Chapter X corporate reorganizations, and added chapters XI (arrangements and compositions for corporations, partnerships, and individuals), XII reorganization procedures for non-corporate entities engaged in real estate, and XIII (wage earner plans). The purpose of the Chandler Act was to encourage and facilitate bankruptcy reorganization in order to avoid unnecessary or premature liquidations.
The Bankruptcy Act of 1891 was not repealed until the passage of the Bankruptcy Reform Act of 1978. The Bankruptcy Reform Act of 1978, as amended, serves as the basic structure for the Bankruptcy Code of today. Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, 92 Stat. 2549, amended by Bankruptcy Amendments and Federal Judgeship Act, Pub. L. No. 98-353, 98 Stat. 333 (1984), and by Bankruptcy Judges, United States Trustees and Family Farmer Bankruptcy Act, Pub. L. No. 99-554, 100 Stat. 3088 (1986), and by the Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, 108 Stat. 4106. When the current Bankruptcy Code was passed in 1978, it became the first such statute to be passed in Congress that was not in a direct response to a financial crisis or panic
The Bankruptcy Reform Act of 1978 remains similar to the Bankruptcy Reform Act of 1891, although improvements have been made. The Bankruptcy Reform Act of 1978 resulted in a complete overhaul of the administrative functions of bankruptcy. Bankruptcy Courts were created in lieu of referees, The Office of the United States Trustee was established and the structure of the Bankruptcy Code was altered to reflect a more streamlined process. The reorganization chapters of the Bankruptcy Reform Act of 1978 were condensed to form the current chapter 11, chapter XIII has become chapter 13 and liquidations (or straight bankruptcies) are now addressed under chapter 7.
The Bankruptcy Reform Act of 1978 also seeks to encourage greater use of Chapter 13, the mode of relief allowing for the readjustment of the debts of individuals with regular income (the old “wage-earner” chapter expanded – chapter XIII). Congress had hoped that creditors would receive greater dividends under a Chapter 13 plan than they would under a chapter 7 liquidation. Congress also hoped that debtors would emerge with better credit. In so doing, Congress rejected any form of compulsory Chapter 13, but offered lieu certain enticements to the chapter 13 debtor (the old carrot on the stick approach that resulted in the first discharge in 4 & 5 Anne, c. 4, sec. VIII (1705)) such as: (1) the “super discharge” of some debts that would not be dischargeable in under chapter 7; and (2) the protection of co-debtors from joint creditors. Subsequent amendments have made Chapter 13 less favorable to debtors by weakening the discharge and requiring compliance with a “disposable income” test as a prerequisite to plan confirmation. Moreover, Bankruptcy Courts may dismiss a Chapter 7 case where it is determined that the granting Chapter 7 relief would be a “substantial abuse” of the liquidation process, thereby leaving the debtor with the choice of dismissal or chapter 13.
DATED:  July 10, 2013
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