At a recent conference of the National Association of Consumer Bankruptcy Attorneys (NACBA) (I’ve been a proud member of NACBA for many years), Assistant United States Attorney General Vanita Gupta spoke about the Biden Administration’s efforts to promote justice and fairness in the bankruptcy process. Some of the remarks are provided below: It’s a privilege to be here at NACBA’s annual convention. NACBA does important work ensuring that debtors receive high-quality legal representation and advocating for systemic improvements to theRead more
Using Technology In My Bankruptcy Practice
When the Covid-19 pandemic hit with full force in the spring of 2020 I made the decision to stop having in-person meetings for consultations and bankruptcy schedule reviews and signings. To protect my health and the health of my staff and my clients I, like millions of other people around the world, started using technology more widely in my bankruptcy practice. I signed up for Zoom, purchased better webcams, expanded our electronic document procedures, created an electronic payment system andRead more
Rising Interest Rates and Bankruptcy
The rapid rise in interest rates is having a big impact on the financial well-being of consumers and businesses. Although a rise in interest rates is often seen as a positive economic indicator, as it can signal economic growth, it can have negative effects on people who have taken out loans or who carry a large amount of debt. Rising interest rates can lead people to need to file for bankruptcy because of the increase in monthly loan payments. InterestRead more
Iowa’s Tricky Homestead Exemption in Bankruptcy
Unlike many states that have a dollar cap on their homestead exemptions, Iowa has an unlimited homestead exemption, meaning that you could protect a homestead of unlimited value from the debt collection of creditors, including a bankruptcy trustee (but not the lender to which you’ve given a mortgage). These homestead exemptions, just like exemptions for other property like vehicles, household goods and retirement accounts, are critical to preventing creditors from taking a debtor’s property in satisfaction of debts not repaid.Read more
Unemployment Overpayment Discharged in Bankruptcy
Some people mistakenly believe that overpayments of government benefits like unemployment and Social Security cannot be discharged in bankruptcy or are entitled to priority status, like recent taxes. In truth, these benefit overpayments aren’t entitled to any special treatment unless the government proves in a separate adversary proceeding that the overpayments were caused by fraud committed by the debtor. A recent Kentucky bankruptcy court decision ruled an overpayment of unemployment benefits was not a priority claim in Chapter 13 bankruptcy.Read more
New Guidelines for Student Loan Discharges in Bankruptcy
New guidelines from the U.S. Department of Justice and the U.S. Department of Education might lead to more federal student loans being discharged in bankruptcy. Although the new guidelines don’t change the Bankruptcy Code or prior caselaw, they might lead to a different approach and attitude by the U.S. Department of Justice when debtors in bankruptcy file adversary proceedings asking that their federal student loans be discharged. To seek a discharge of student loans in bankruptcy, debtors must go beyondRead more
Deferred Compensation Plans Protected From Creditors
In two separate rulings by the Iowa Supreme Court and the U.S. Bankruptcy Court for the Northern District of Iowa, debtors who have deferred compensation plans through their employer should have less concern about losing the benefit of those plans either inside or outside bankruptcy. Iowa law provides an exemption from attachment by a creditor for any payments made under a “pension, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service.” InRead more
Divorce and Bankruptcy
Few issues cause more conflict in bankruptcy then a previous divorce with conflict between the spouses. Contentious divorces cause contentious bankruptcies. Some issues are clear. For example, alimony and child support can’t be discharged in any kind of bankruptcy. A property settlement obligation can’t be discharged in any kind of bankruptcy EXCEPT Chapter 13. But what about debts resulting from divorce that aren’t clearly identified as either alimony, child support or a property settlement? For instance, an award of attorneyRead more
Why Are You Waiting to File Bankruptcy?
Making the decision to file bankruptcy is not easy. I understand that as well as anyone. People are worried about what others will think. They’re worried about their future access to credit. They’re worried about whether they will lose any property. But the consequences of delaying the decision to file bankruptcy is so severe that debtors should ask themselves “What am I waiting for?” More and more, people are waiting until judgments have already been issued for delinquent debt orRead more
Willful and Malicious Injuries Not Discharged in Bankruptcy
Although almost all debts are discharged when someone files bankruptcy, there’s a small number of types of debts that aren’t discharged. For example, the bankruptcy code excludes from discharge any debts for willful and malicious injuries caused by the debtor. Prior to 1978 the standard for interpreting the phrase “willful and malicious” was whether the debtor had acted with “reckless or knowing disregard,” but passage of the Bankruptcy Reform Act of 1978 overruled that interpretation of the phrase. The bankruptcyRead more
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