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

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

Although most attention is paid to what someone filing bankruptcy needs to do before filing, there are some things debtors must do after a bankruptcy is filed. Documents have to be produced, counseling has to be taken and a required “meeting of creditors” occurs about one month after filing. After a bankruptcy is filed, debtors (through their attorney) must provide the trustee administering their case certain documents. These include the most recent tax returns, statements showing the balances in anyRead more

As I write this article I’m attending a workshop for members of the National Association of Consumer Bankruptcy Attorneys (NACBA). It’s the first time we’ve met for a long time (we’re all vaccinated against COVID and wearing masks now). But being around other consumer bankruptcy attorneys reminds me why I love helping people file bankruptcy. We’re all committed to helping clients move beyond the burdens that debt places on people. When potential clients contact me they often ask whether filingRead more

Chapter 13 bankruptcy is often used to “cure” mortgage defaults. Debtors can spread the amount of the default over five years to get caught up on mortgage payments and avoid foreclosure. It’s a better approach than the typical loan modification offered by mortgage lenders that attach the default balance to the end of the loan. Those modifications result in interest being paid on interest and a loss of home equity. Sometimes though, and especially during the recent pandemic and economicRead more

A common concern of people already in bankruptcy and people thinking of filing bankruptcy is the status of the stimulus payments resulting from Congress’ passage of the 2020 CARES Act and the more recent American Rescue Plan Act (ARPA). People are concerned the money will be taken by the bankruptcy trustee to pay creditors. Fortunately, Congress anticipated that concern and inserted language in the laws preventing stimulus payments from being taken by a trustee. The laws specifically say stimulus paymentsRead more

In a Chapter 13 bankruptcy, debts given “priority” status by the bankruptcy code must be paid in full during the plan (usually 3-5 years). Priority debts include “domestic support obligations,” such as delinquent child support and alimony. What qualifies as child support and alimony is usually obvious, but what about attorney fees often ordered to be paid in a divorce decree? Are attorney fees also considered domestic support obligations? A recent decision from the 8th Circuit Court of Appeals BankruptcyRead more

One of the requirements for filing Chapter 7 and Chapter 13 bankruptcy is the need to take a credit counseling course before and after filing. The credit counseling requirement was added in 2005 and is a silly and generally useless expenditure of time, but it’s not something to be feared. It can be done on a computer or over the phone and usually takes no more than 2-3 hours of time total for both courses. The cost for both coursesRead more