Consumer Bankruptcy

"Broken Arrow" Chapter 11 Trustees and the New Sheriff Appointment, Job Description and Ethical Issues

Consumer Workshop III: "Every Which Way but Loose" - Presenting Your Chapter 13 Case Ethically and Effectively

Consumer Workshop II: "True Grit" - Chasing Down Loan Modifications for Consumers

Today's Chapter 13: Most Recent Case Law Regarding "Projected Disposable Income" and Latest Issues Concerning Feasible Chapter 13 Plans

Consumer Issues in the New Congress

Litigation Symposium: Mortgage Documentation Mess: Foreclosure Resistance, Vignettes and Mock Presentation

Means Test Does Not Require Dismissal if Chapter 13 Is Zero

By: Bryan Kotliar
St. John's Law Student
American Bankruptcy Institute Law Review Staff 

Recently, in In re Siler,[1] the court allowed a debtor whose monthly disposable income created the presumption of abuse under the means test to remain in chapter 7 since the creditors would not receive any distribution under a chapter 13 plan.[2] Generally, if a debtor cannot rebut the presumption of abuse, the case must be dismissed or converted to chapter 13, which is why the Bankruptcy Administrator[3] moved to dismiss.[4] However in this case, under a chapter 13 plan, the debtor would be entitled to deduct her ERISA contributions and 401(k) loan obligation repayments from her monthly disposable income—deductions not available for her CMI calculation under chapter 7.[5] Because of these deductions, creditors would not receive any distribution under an alternate chapter 13 plan.[6] Therefore, the court held that the debtor was entitled to remain in chapter 7, notwithstanding the language of 707(b), because dismissing or converting her case to chapter 13 would create absurd results contrary to Congress’s intent.[7]

Is It Too Early to File for Bankruptcy Outstanding Checks Written Pre-Petition Are Property of the Estate

By: Elisa M. Pickel
St. John's Law Student
American Bankruptcy Institute Law Review Staff

Recently, in In re Brubaker[1] a Florida bankruptcy court held that funds related to checks that had not cleared were property of the estate under section 541(a)(1) of the Bankruptcy Code.[2] In Brubaker, the debtors wrote several checks before filing for chapter 7 relief.[3] As of the filing date, these checks had not cleared, and therefore the funds remained in the debtors’ bank account.[4] The bankruptcy court rejected the debtors’ argument that these funds transferred on the dates that the checks were presented to the recipient, and thus were not property of the estate. Instead, the court noted that funds do not transfer until the checks are honored. Thus, the court held that funds remaining in the account were property of the estate since the debtors’ bank had not honored the checks.

Consumer Bankruptcy: Proceed with Caution: Ethical Dilemmas Facing Today's Consumer Practitioners

Consumer Bankruptcy Cases Year in Review: A Look at Supreme Court and Appellate Decisions