Disposable monthly income

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 Chapter 13 bankruptcy.

I.          Retirement Contributions In A Chapter 7 Bankruptcy

There are at least two reasons why Chapter 7 debtors would want to continue contributing to their retirement plans (for linguistic simplicity, let’s assume we’re dealing with a 401(k) plan, since it’s easier to type “401(k)” than “retirement plan”):  First, to provide for those golden years of not having to spend two plus hours a day commuting (those of you who don’t live in a traffic nightmare area like the Los Angeles environs may not understand this problem except on a theoretical level, but it’s very real here), and second, to chew up income to qualify for Chapter 7 relief.
Continue Reading Can I Continue To Contribute To My Retirement While In Bankruptcy? (Part 1)

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

The popular wisdom says that an individual or a married couple can file for bankruptcy under either chapter 7 to discharge debts without paying them, or chapter 13 to pay back some of the debts through a court-administered, multi-year, partial debt repayment plan, while a business files under chapter 7 if it is going out of business, or chapter 11 if it needs to reorganize.  There is some truth to this wisdom, but it fails to take into consideration the personal chapter 11 bankruptcy.  This post looks briefly at just a few characteristics of personal chapter 11 bankruptcy.
Continue Reading Personal Chapter 11 Bankruptcy