Here is the third defense against preference avoidance actions, the so-called security interest defense. Defenses To Preference Avoidance Actions, Part III: The Security Interest Defense Suppose you wish to buy a new car that costs $30,000, but you don’t have $30,000. Your solution is to borrow money for the purchase. The lender wants some assurance… Continue Reading
This is the second post devoted to defenses against preference avoidance actions. It covers the so-called ordinary course of business defense. Defenses To Preference Avoidance Actions, Part II: The Ordinary Course Of Business Defense Suppose a corporate debtor in Chapter 11 has a lease on the building in which it conducts its business. Suppose the… Continue Reading
Defenses against a preference avoidance action.
The trustee can undo preferential transfers, so the debtor loses the imagined benefit from making the payment.
I’m back. I have been busy writing a book on Chapter 13 bankruptcy — I was asked to do so by a publisher. I should have it completed in a few months, so watch for it. In any event, I am ready to start posting again. Some time ago I posted on preferential transfers (a.k.a…. Continue Reading
Are tax-deferred retirement accounts that are not ERISA-qualified in jeopardy in a Chapter 7 bankruptcy?
I recently had an email exchange with a fellow bankruptcy attorney who was a little confused about something called the § 1111(b) election in a Chapter 11 bankruptcy. Her confusion was easy to understand because there are some interesting wrinkles in the statutory language that are worth exploring. Before we get into the somewhat arcane… Continue Reading
This is a simple question to pose, but the answer is a bit more complicated to give. Part of the complication lies in the fact that in bankruptcy social security has two identities: it is income, and it is an asset. The rest of the complication arises because there is more than one chapter of… Continue Reading
On January 30, 2013 Shan Li of the L.A. Times reported: Nearly 44% of American households are one emergency away from financial ruin. That means they don’t have enough savings to cover basic living expenses for three months if something unforeseen happens such as losing a job or falling sick, according to a recent study… Continue Reading
This easy question to state has a surprisingly complicated answer. This is bad news if you were hoping for a simple yes or no, but good news if you’re a fan of more complex legal analysis. In this post, I’ll discuss retirement contributions within the Chapter 7 context. In my next post, I’ll discuss retirement contributions in a… Continue Reading
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… Continue Reading
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… Continue Reading
The short answer to this is, yes. But as you may suspect from the fact that this post is considerably longer than one sentence, there is a good deal more to a thorough answer than that monosyllabic response. There are two possibilities regarding your previous bankruptcy: (1) you received a discharge, and (2) your case… Continue Reading
What is an ipso facto clause? The phrase ipso facto is Latin for “by the fact itself.” Ipso facto clauses are sometimes included in lease and purchase contracts, and they assert that if the lessee or purchaser becomes insolvent, or files for bankruptcy protection, then the contract has been breached. In other words, under such… Continue Reading
On occasion I have potential clients who have set up trusts, and want to know if the assets in the trust will be in jeopardy in a Chapter 7 bankruptcy. My answer has always been: “It depends.” And after recently attending a first rate continuing legal education presentation by two erudite colleagues, Mark Jessee and… Continue Reading
A fellow bankruptcy attorney recently posed an interesting pair of related questions: How (if at all) does a valid prenuptial agreement affect the requirements to list a non-filing spouse’s income in CMI per 707(b)(7)(B)? Does it make ALL of the spouse’s income includable in the “marital adjustment”? Here is my response. I. The Bankruptcy Code’s… Continue Reading
Before getting into the meat and potatoes of today’s post, I want to acknowledge a comment by a fellow bankruptcy attorney. At a recent continuing legal education presentation she asked why I hadn’t been regularly posting, and encouraged me to post more frequently. I must confess that since I hadn’t heard much from my readership,… Continue Reading
An ongoing source of distress for debtors is truly abusive debt collectors. Many of these alleged humans ignore the due process rights of debtors, lie, and break the law in their efforts to shake down debtors. Can anything be done? Finally, the federal and state governments are starting to take some action. I. The Problems… Continue Reading
Occasionally, I meet with a potential client who tells me that he doesn’t want to list all of his income, assets, debts, or expenses. If the potential client doesn’t accept my warnings about the consequences of this sort of bankruptcy fraud, I politely escort them to the door. That potential client never becomes an actual… Continue Reading
I recently had an exchange with a fellow bankruptcy attorney who expressed some confusion over the treatment of car leases in bankruptcy. His confusion arose because of something he heard a judge say at a hearing on reaffirmation. The judge’s comments appear to indicate that the distinction between lease assumption and debt reaffirmation is not… Continue Reading
At first blush you might wonder if today’s title has a religious theme, or refers to cashing in coupons for valuable prizes. While this post’s thrust does involve deliverance of a sort, it’s not intended as an evangelistic outreach. Instead, this essay focuses on a special provision in Chapter 7 of the Bankruptcy Code: An… Continue Reading
In the May 29, 2012 Los Angeles Times, Tiffany Hsu reported: Storied law firm Dewey & LeBoeuf – which once advised the Los Angeles Dodgers on their restructuring – is itself filing for Chapter 11 protection as it prepares to liquidate. On April 25, 2012, Joe Palazzolo of The Wall Street Journal’s Law Blog reported:… Continue Reading
I’ve been a bit busy lately, and haven’t posted anything for a while. I plan to remedy this over the next couple of weeks. This post begins that process of “blogging rehabilitation.” Some time ago I posted an article discussing the consequences of omitting a creditor in a debtor’s bankruptcy papers. Recently, I had an… Continue Reading
I. What Is Mortgage Rescission? Rescission is a way for a borrower to get out of a mortgage that was fraudulently or deceptively originated. For example, if the lender misrepresented the terms of the mortgage by failing to disclose a balloon payment, or the nature of the adjustable rate, or advised the borrower to inflate… Continue Reading