February 2013

In Part 1 of my two-part series discussing the issue of filing for bankruptcy after a previous bankruptcy had been filed, I mentioned “disposable monthly income” in the context of Chapter 13 bankruptcy and told you that this post would discuss it in detail.  This isn’t the first time I have promised to discuss this topic.  I have put it off because of the somewhat esoteric, indeed recondite, dare I even say arcane, nature of the subject.  However, there have been some very recent developments in the case law on “disposable monthly income” that make it ripe for discussion.  Therefore, this post makes good on my promises. Continue Reading Disposable Monthly Income In A Chapter 13 Bankruptcy

Today, the Wall Street Journal’s Market Watch had an article by Michael Casey with the provocative headline:  Why a flood of bankruptcies is good for America.  It’s nice to see that the chronicler of record for the American economy understands the principle I’ve been stating for a long time.

In his article Mr. Casey compares the draconian approach Europe has to insurmountable debt with the much more sensible American position:

In Europe, . . . a place that is now beset by economic stagnation, sliding property prices and soaring unemployment, people are straitjacketed by laws that make it nearly impossible to have their debts forgiven.  In the U.S., by contrast, growth is returning and both consumer and business confidence are picking up after millions of foreclosures and personal bankruptcies were rammed through the courts.  The American economic system, shaped by an ethos that treats failure as a necessary if unwelcome element of entrepreneurship, is doing what it does best:  renewing itself.  The fact that Europe’s can’t do the same should ensure that investment flows favor the U.S. over time.  So although the euro’s higher interest rates are currently giving it the edge over the dollar, the greenback’s future is brighter.  And a key reason for that is because the U.S. economy has a better mechanism for clearing its debts.

Life is messy, and as Robert Burns put it:  “The best-laid schemes o’ mice an’ men gang aft agley, an’ lea’e us nought but grief an’ pain, for promis’d joy!”  Therefore,  it should come as no surprise that many people will find themselves in financial straits.  It is therefore good to live in a country that gives people a second chance through bankruptcy after financial difficulties.  Indeed, without the possibility of a fresh start after a failed business venture, most people would be reluctant to start a new business.

Section 8 of the very first article of the U.S. Constitution states:

The Congress shall have Power To . . . establish . . . uniform Laws on the subject of Bankruptcies throughout the United States . . .

If way back in the 1780s the Founders saw fit to include bankruptcy in the very short list of enumerated powers of Congress in Article 1, section 8  of the Constitution, we may conclude that they felt that a fresh bankruptcy start was important.  As a result, America has been the land of entrepreneurs and innovation, more so than any other country in history.

Moreover, if God says bankruptcy is a good thing, who am I to argue with the King of the Universe?  After all, at the Lord’s command Moses wrote:

At the end of every seven years thou shalt make a release.  And this is the manner of the release:  Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the Lord’s release.

Deut. 15:1-2.

Now, if only the state and federal governments could get rid of their debts.  Unfortunately, that would require that the elected officials actually cared about the good of the country rather than the good of themselves.  Maybe one day . . . when pigs learn to fly.

If you’re facing insurmountable debt and you want to get the fresh start that bankruptcy affords, call a high quality bankruptcy attorney to learn of your options.

My previous post dealt with the first of two possible settings involving a previous bankruptcy.  The first setting was when you received a discharge in the previous bankruptcy.  Today’s post deals with the second situation, i.e., your previous bankruptcy was dismissed.

II.        Your Previous Case Was Dismissed

Other than the 180-day bar of § 109(g), or some other time bar imposed on you by the Court because of naughty behavior, there is no time bar to filing another case after a dismissal.

However, there is a serious loss of protection with serial filing.  Most particularly, you lose the protection of the automatic stay, which is perhaps the most important benefit of filing — other than the discharge.  A little history will help to set the stage. Continue Reading Can I File For Bankruptcy More Than Once? (Part 2)