Bankruptcy Flashcards
(192 cards)
1
Q
What is the lookback period for general creditors?
A
90 days
2
Q
What is the lookback period for insiders
A
One Year
3
Q
What is the $ threshold for general creditor consumer debt?
A
More than $600 within 90 days of filing
4
Q
What is the $ threshold for general creditor business debt?
A
More than $6,825 within 90 days of filing
5
Q
What is the general exception to preferential transfer rules?
A
Transfer isn’t preferential if debtor was solvent at the time
6
Q
What is the lookback period for fraudulent transfers?
A
Two Years
7
Q
Actual Fraud (Elements)
A
- Transfer was made within 2 years of filing AND
- Transfer was made within intent to defraud creditor AND
- Transfer rendered debtor insolvent OR debtor was already insolvent at the time
8
Q
Constructive Fraud (Elements)
A
- Transfer was made within two years of filing AND
- Debtor received less than reasonably equivalent value AND
- Debtor was insolvent at the time of the transfer OR became insolvent because of the transfer
9
Q
Preferential Transfer (Elements)
A
- Transfer of an interest of the debtor in property
- To or for the benefit of the creditor
- Made within the applicable look back period
- By an insolvent debtor
- On an antecedent debt
- Creditor received more than they would have in chapter 7
10
Q
Preferential Transfer (Statutory Defenses)
A
- Contemporaneous Exchange
- Ordinary Course of Business
- Subsequent New Value
11
Q
Preferential Transfer (Non-Statutory Defenses)
A
- Ear Marking
- Constructive Trusts
- “Mere Conduit”
12
Q
Contemporaneous Exchange 547(c)(1)
A
- Intended by creditor AND debtor to be a contemporaneous exchange for new value AND
- Exchange was in-fact contemporaneous AND
- New Value was in fact given
13
Q
Ordinary Course of Business 547(c)(2)
(General Elements)
A
- Debt was incurred in ordinary course of business +
- Payment made in the ordinary course of business +
- Payment made according to ordinary business terms
14
Q
Subsequent New Value 547(c)(4)
A
- After transfer creditor gave new value to/for benefit of debtor
- NOT secured by an otherwise avoidable interest +
- Debtor did not make another payment in response
15
Q
Ordinary Course of Dealing (Factors)
A
- Length of time parties have engaged
- Was payment for more than normal?
- Was the manner of payment abnormal?
- Did the creditor due anything to gain advantage?
16
Q
Antecedent Requirement
A
Transfer must be for an antecedent debt to be avoidable
17
Q
Insolvency Requirement
A
Debtor must have been insolvent at the time of transfer for a transfer to be avoidable
18
Q
Insolvency Presumption
A
Section 547 (preferences) presumes that a debtor is insolvent for the 90 day period preceding the filing
19
Q
Utility Companies (11 U.S.C. §366)
A
- Automatic stay prevents utilities for stopping service for 20 days
- Debtor MUST provide provide ‘adequate assurance’ within 20 days
- Be sure to list utility debt on schedule
- Payments are arguably made in the ordinary course
20
Q
Luxury Item (Elements for Presumption of Fraud)
A
- Purchase from one creditor
- Made by a credit card
- Within 90 days of filing
- For $725 or more
21
Q
Burden of Proof (Without Presumption of Fraud)
A
Trustee must prove that the debtor didn’t intend to repay the debt at the time the purchase was made
22
Q
Recent Cash Advances
A
No discharge if debtor received a cash advance(s):
- Totaling more than $1,000
- From a single creditor
- For a consumer purchase
- Within 70 days of filing
23
Q
Debts Not Dischargeable Under Any Circumstance
A
- DSOs
- Fines, penalties, restitution
- Taxes that weren’t filed or filed fraudulently
24
Q
Discharging Property Taxes
A
- Debtor can discharge property taxes that were payable (without penalty) more than one year before the filing
- Lien will remain on property
25
Property Tax as Administrative Claim
Property taxes assessed during a bankruptcy are treated as administrative claims
26
Property Taxes (Chapter 13)
Plan must offer to pay 100% of property taxes that were last payable within one-year before case is filed
27
Debt Incurred to Pay Non-Dischargeable Taxes
- Not dischargeable in chapter 7 (though a credit card company might not screen/identify the charge and thus fail to object)
- Can be discharged under chapter 13
28
Discharging Income Taxes (Elements)
1. Debtor filed return(s) for the year(s) in question
2. Return(s) were filed at least 2 years prior to filing bankruptcy
3. Return(s) were due at least 3 years prior to filing bankruptcy
4. Liability assessed at least 8 months prior to filing bankruptcy
5. Debtor did not attempt to willfully evade tax
29
Prior Non-Dischargeable Debts
Debtor cannot discharge debt that was listed in a previous bankruptcy dismissed for fraud or malfeasance
30
Discharging Income Taxes (Tolling)
- IRS doesn't necessarily assess liability when taxes are filed
- 240 day period can be extended/tolled by IRS OR if debtor made an offer of compromise
31
"Late" Income Tax Return (and discharge)
1. "Late" return does not satisfy the requirement of filing taxes for relevant year in regard to discharging income taxes
2. Late = all extensions have expired and IRS filed a "substitute return" without debtor's assistance
32
Debts Discharged in 13 But Not 7
1. Marital debts created in a divorce or settlement agreement
2. Debts incurred to pay non-dischargeable debt
3. Court fees
4. Debt's that couldn't be discharged in a prior bankruptcy
33
Co-signor Debt in Chapter 7
1. Joint debtor will owe entire amount
2. Can be addressed via reaffirmation agreement
3. Better for the debtor to make separate agreement to reimburse co-signor (though co-signor credit will take a hit)
34
Co-Signor Debt in Chapter 13
Creditor can still go after co-signor for balance after plan is done
35
When Can Exempt Property Still Be Taken?
When Debtor owes money for:
1. DSOs
2. Back taxes
36
Tenancy by the entirety (general)
- Permits spouses to jointly own property as a separate legal entity
- Each spouse has an equal/undivided property interest
- Creditors cannot enforce a lien on any property that falls under a tenancy by the entirety if only one spouse owns the debt
37
Tax Liens and Chapter 7
- Tax liens are not discharged in chapter 7
| - Trustee is unlikely to liquidate property if proceeds would simply go towards paying off liens
38
Tax Lien and Personal Property
Tax liens can attach to personal property
39
Avoiding Transfers and Homestead Exemption (Penalty)
Any transfer made for purpose of putting property beyond reach of creditors for TEN YEARS preceding bankruptcy can deprive debtor of homestead exemption altogether.
40
Ways to Reduce Home Equity and/or keep home
1. Refinance mortgage for more than debtor currently owes
2. Offer to pay cash for difference between value and exemption
3. File for Chapter 13
4. Reverse Mortgage
- But see penalty of losing homestead exemption for transfers intended to put property beyond the reach of creditors
41
Keeping House in Chapter 7 (When Behind on Mortgage Payments)
- Lender will ask court to lift the stay (court will likely do it)
- GOAL: stave off foreclosure for length of bankruptcy case. Debtor may have an easier time repaying mortgage once other debts are wiped out.
42
Credit Counseling Requirement (Time Prior to Filing)
180 days prior to filing
43
Credit Counseling Certificate of Completion (timeframe for filing)
No later than 15 days after filing date
44
Credit Counseling Plan (Requirements and Non-Requirements)
- Doesn't have to be followed
| - DOES have to be filed w/ petition
45
Means Test (Median Income)
Debtor does not have to take means test if income is below state median income given household size
46
When Doesn't Debtor Have to Pass Means Tests?
1. Debts are not primarily consumer debts
2. Disabled veteran + incurred debt primarily during active duty
3. Income is below the state median OR
1. Debt is primarily NON-consumer debt
47
Methods of Protecting Cash
-Spend cash on necessary items (food, needed clothing, utilities, rent, car repairs) + Keep receipts
Use exemptions ($1,325 wildcard and $12,575 spillover = $13,900 total)
(Clients with cash are a *red flag*)
48
Protecting Cash (Balance of Account)
Exemption amount will be based on balance of the date of filing (not account for any pending payments)
49
Setoff in Chapter 7
Banks/Credit Unions can take money out of debtor's account to "set-off" any $ debtor owes creditor (bank)
-Must request lifting of automatic stay
50
Frozen Bank Account in Chapter 7
Bank might freeze debtor's account EVEN IF debtor doesn't owe bank any $
- Bank argues that account is property of the estate and they are protecting it for the trustee
- Contact trustee to instruct bank to release exempt funds
- OR file a motion in court
- Debtor should open an account at a new bank BEFORE filing
51
Bank Account in Chapter 7 (Balance)
-Make sure that checks have cleared before filing
-Otherwise balance may be higher than amount stated
(listed $5k on account but only have $4k after checks clear = you owe the trustee $1k to make up for the difference).
52
Federal Wildcard Exemption
$1,325
53
Federal Homestead "Spillover" Exemption
$12,575
54
Getting a Bank Account After Chapter 7
It might be easier to get one than before because the bank will know that your debts have been discharged
55
Methods of Protecting Cash (What NOT To Do)
- Don't buy gift cards
- Don't withdraw cash
- Don't buy luxury goods
- Don't buy anything out of line with normal spending patterns
- Don't make preferential payments
- Don't use a credit card
56
Tax Refund (Estimate When Amount is Unknown)
-If debtor has had no major life changes (marriage, having kids, buying house, new job) use prior years as an estimate
57
Tax Refund (Estimate When Amount is Unknown)
- If debtor has had no major life changes (marriage, having kids, buying house, new job) use prior years as an estimate
- If debtor HAS had major life changes = find a free tax refund calculator
58
Why Do I Have To List My Refund When I Won't Get It Until Next Year?
- Assets are everything you own or have an interest in
| - Since you're paying taxes now you have an interest now
59
Tax Refunds Seized Pro-Rata
- Trustee can only take portion of tax-return that can be traced back to pre-petition efforts
- Trustee can take 100% of refund if debtor files in January (or at any point prior to receiving the refund)
60
Cross Collateralization
Practice of credit unions to secure loans/credit cards with any collateral purchased with funds obtained from the credit union (like a car)
61
Credit Union/Bank Account Pre-Filing Work (When Debtor Owes a Balance to the Bank)
1. Pull money out
2. Stop direct deposit
3. Get a year's worth of statements (especially if closing account)
4. Make sure all checks have cleared
62
Annulment of Stay
Court can annul a previously issued stay in cases where debtor abuses the system
63
Automatic Stay and Delinquent DSO
| §362(b)(2)(B)
Act to collect delinquent DSO from property that is NOT part of the estate is NOT a violation of the stay
64
Creditor's Duty to Surrender
Creditor must immediately surrender property that is either property of the estate or could be claimed as exempt by the debtor
65
Single Serial Filer
| one previous case pending within 1 year
Stay expires after 30 days
66
Multiple Serial Filer
| more than one prior case within 1 year
Stay never goes into effect unless court orders it
67
Single Serial Filer (Motion to Extend Stay)
Motion to extend the stay must be *concluded* within 30 days (notice must be provided to creditors)
68
Grounds for Relief from Stay
- Lack of adequate protection
- Debtor has no equity in property and property is not necessary for effective reorganization
- Debtor filed w/ intent to delay/hinder/etc
69
Lack of Adequate Protection (response)
1. Show that equity cushion is sufficient to cover claim without additional risk of loss to creditor OR
2. Offer additional protection
- Get collateral insured
- Provide cash deposit
- Get co-signor
- Offer additional assets as collateral
70
Relief from Stay (30 days)
Relief from stay is granted AUTOMATICALLY 30 days after the first hearing on the motion
- Either get a hearing scheduled less than 30 days out OR
- Get a stipulation on the record that stay will remain in effect until matter is heard
71
Relief from Stay (30 days)
Relief from stay is granted AUTOMATICALLY 30 days after the first hearing on the motion
- Either get a hearing scheduled less than 30 days out OR
- Get a stipulation on the record that stay will remain in effect until matter is heard
72
Reinstating the Stay
Relief from stay is granted AUTOMATICALLY 30 days after the first hearing on the motion
- Either get a hearing scheduled less than 30 days out OR
- Get a stipulation on the record that stay will remain in effect until matter is heard
73
Violations of the Stay (types)
1. Continuing attempts to collect on debt
| 2. Refusing to turn over property of the estate
74
Violations of Stay and Incorrect Notice Sent to Creditors
Failure to use address provided to the court by creditors results in creditor not owing monetary sanctions for a violation of the stay
75
Statement of Intentions (deadline to act)
45 days from the date statement is filed
76
Statement of Intentions (Creditors right when debtor intends to surrender property)
Creditor cannot move forward with repossession until stay has lifted (even if debtor intends to surrender)
77
Statement of Intention (Deadline to File)
30 days within filing of petition OR the first 341 (whichever is earlier)
78
Supplemental Property Schedule (Deadline)
Debtor must file a supplemental property schedule within 10 days of receipt of new property
79
Small Business Property (and estate)
- Debtor technically has a duty to surrender business property to the trustee (even if exempt)
- Debtor cannot sell/transfer property until trustee files a notice of abandonment of the property
80
Post-Petition Transfer of Property (Debtor's Rights)
Debtor may NOT transfer any estate property after filing the petition WITHOUT the consent of the trustee
81
Security Deposits (and Property of the Estate)
Security Deposits are considered property of the estate
82
Appreciation of Exempt Assets
- Appreciation in an exempt asset is also exempt, except where the appreciation causes the value to exceed the threshold for an exemption
- Pay attention to appreciation caused by market forces v debtor's post-petition work
83
Tax refund and the estate
Whether a tax refund is property of the estate depends on the extent to which it was generated by prepetition income
84
Strong Arm Power
Power of the trustee to reverse transactions or liens filed before the bankruptcy case
85
Marshalling (General)
Requires a senior creditor to satisfy its claim first from property or a fund in which a junior lien holder has no interest
86
Time Limit to Reopen a Case
None
87
Voluntary Transfers (Loss of Exemption)
- No exemption for property that was voluntarily transferred preferentially or fraudulently
- Property that was involuntarily transferred away from debtor by a creditor and recovered by a trustee can be claimed as exempt
88
Liquidation Value
- Amount of $ left for trustee after selling an item
- Value to be used in the evaluation stage of a chapter 7
- Subtract auction/house-sale fee, taxes, reduction for distress sale and trustee fee
89
Federal "Spillover" Amount
$12,575
90
Federal Wildcard Amount
$1,325
91
Federal Homestead Exemption
$25,150
92
Tools of the Trade Amount (exemption amount)
$2,525
93
Tools of the Trade (Requirements)
- Must relate to debtor's trade or profession at the time of filing the petition
- Debtor must be self-employed in most jurisdictions
94
Child Support as Exempt Property
Child support received is exempt from trustee
95
Objection to Exemption (timeframe)
Objection must be within 30 days of:
1. 341 OR
2. Any amendments/supplements to the schedule
96
Homestead Exemption for Couples (trap)
-Verify that the debtor's are legally married
97
Response to Objection to Exemption
-Debtor attorney must request a hearing pursuant to 4003(c) and Rule 9014
98
Priority Claims
- Generally unsecured
- Generally non-dischargeable
- Have priority in order of distribution from estate
- Must be paid in full before non-priority unsecured debtors receive anything
- Ensure that claims are filed on behalf of priority creditors so they get paid (non-dischargeable!)
99
Filing on Behalf of Creditor
-Be sure that priority claims get filed so $ goes to them (as they are non-dischargeable)
100
Administrative Claims
- Typically occurs post-petition
- Deemed necessary to preserve bankruptcy estate
- Paid before unsecured claims
- Trustee fees, post-petition taxes, cost of storage/valuation/etc
101
Calculation for Keeping House (Factors to Consider)
- Remember trustee would first have to pay:
1. Debtor exemption amount
2. Mortgage
3. Administrative expenses
102
Utility Service Claims (caution)
-Debtor must post a bond within 20 days of filing if they list an ongoing-provider on the schedule
103
Order of Priority
1. DSOs owed to (ex) family members
2. DSOs owed to government unit
3. Administrative Expenses
4. Priority unsecured claims
5. General unsecured claims
104
When is an unsecured claim NOT dischargeable?
When they are based on fraud or intentional tort
105
How is an under-secured claim "scheduled"?
Bifurcated between secured and unsecured portions
106
Debtor collateral to family (red-flag)
Press client on the validity of the arrangement
107
Levy (as opposed to lien)
- Levy forces the debtor to relinquish their property
| - Lien is a mere security interest. It provides notice of third-parties of imperfect title
108
Value of Collateral (for exemptions)
Liquidation Value (includes cost of sale, taxes, etc)
109
Redemption (Required Elements)
- Debt is dischargeable
- Debt is a consumer debt
- Property is tangible personal property
- Property is exempt/abandoned
- Property is intended primarily for personal, family, or household use
110
Value of Collateral (for redemption)
FMV less liquidation costs, out of pocket expenses (storage, appraisal, towing, etc)
111
Debtor options for secured property in chapter 7
- Redeem (and discharge balance if any)
- Reaffirm (and keep property if exempt)
- Surrender collateral
- Continue paying on original contract without reaffirming and keep the property
112
Statement of intention (amendment)
Debtor may amend their statement of intention after initially filing
113
Order of Abandonment
-Potential option if property is of nominal value to the estate but the trustee won't abandon it
114
Redemption (procedural/court requirements)
- Redemption agreement must be approved by the court
- Requires a notice and hearing
- Requires at least some evidence of value
115
Surrendering Used Property (strategy)
Call the creditor's bluff and see if they want to spend time/money picking up shitty property
116
Reaffirmation (leverage against creditors)
- Creditors are often willing to negotiate amount owed
| - Creditors would rather have $$ than used goods
117
Defaulting on Reaffirmation
- Debtor is responsible for entire amount under the original contract
- Reaffirmation negates the bankruptcy as to the reaffirmed obligation
118
-Call the creditor's bluff and see if they want to spend time/money picking up shitty property
-Call the creditor's bluff and see if they want to spend time/money picking up shitty property
119
Rescinding Reaffirmation
- Debtor may rescind the reaffirmation agreement 60 days from the later of:
1. The date the agreement was filed OR
2. The date of the discharge
120
Ipso Facto Clause
- A clause which allows termination of a contract due to insolvency or bankruptcy
- Generally unenforceable
121
Unavoidable Lien May be Invalid
-Remember to examine whether or not an otherwise unavoidable lien is invalid
122
Avoiding a Judgement Lien (What Survives)
An avoided judgement liens survives only on the non-exempt portion of debtor's property
123
Liens that Attached Prior to Ownership
A debtor may not avoid a lien that attached to property *before* the debtor obtained an interest in the property
124
Filing proof of claim on behalf of debtor
- Non-exempt assets + non-dischargeable debts
| - Debtor has 30 days to file on behalf of the creditor if necessary
125
What Does the Stay Protect?
1. Debtor
2. Property of the debtor
3. Property of the estate
126
Tax Liens/Levies and the Stay
The stay prevents:
1. Tax liens
2. Tax levies
3. Consummation/completion of tax levies
127
What is NOT stayed
1. Setoffs (stay made need to be lifted)
2. Debt acquired AFTER filing
3. Criminal/family law
4. Taxes
128
Time needed before filing again (chapter 7)
8 years (if discharge was granted)
129
Time needed for filing again (chapter 13 before 7)
6 years (if discharge was granted)
- unless debtors were paid in full OR
- debtor paid 70% of debts in good faith
130
Consumer Debts
Incurred by an individual primarily for a personal, family, or household purpose
131
Business Debts
Business debts are debts that you incurred to obtain
| money for a business or investment or through the operation of the business or investment.
132
Preference Avoidance (Third Parties)
Payments made by third-parties are not preferential (preference is predicated on the transfer being property belonging to the debtor)
133
Debtor Avoiding Preferential Transfers
Debtor can avoid preferential transfers if:
1. The property could be exempted AND
2. The transfer wasn't voluntary`
134
Paying Off One Credit Card w/ Another
Likely to be viewed as a preference payment
135
Exempting Fraudulently Transferred Assets
Debtor may not exempt fraudulently transferred assets that are subsequently recovered by the trustee
136
Subordination of Liens
Trustee can subordinate tax liens in order to satisfy other categories of claims
137
When The Stay Might Be Lifted (Examples)
1. Mortgage lender will lose $ waiting for foreclosure
2. Debtor doesn't plan to reaffirm/redeem car
3. Eviction started but no eviction order/judgment
4. Creditor alleging fraud
138
Recovering Garnished Wages
1. Garnishment transfer must qualify as a preference (90 days)
2. Garnished funds must be exemptable
3. Put the creditor on blast!
139
Current Monthly Income (CMI)
1. Average monthly income
2. From all sources
3. That the debtor (and spouse) receive
4. From the preceding 6 month period
140
Protecting Automobile
1. Start by calculating equity (no equity = no value to the trustee)
2. Apply $4,000 exemption
3. Might be able to keep car without reaffirmation agreement if payments are still made
141
Federal Automobile Exemption Amount
$4,000
142
Repeat Filer + Non-Repeat Filer Spouse
Stay operates "as normal" to the non-repeating filer
143
Trustee and Leases
- Trustee is highly unlikely to assume/reassign a lease (either because it has no value or because reassignment is prohibited by the lease itself)
- Rights revert to the debtor once trustee abandons the lease
144
Offer of Judgment
1. Offer is made to settle civil suit
| 2. If party rejects offer and court decision is less favorable than offer = party that rejected offer is penalized
145
Consent Judgment
A judgment issued by a judge based on an agreement between the parties to a lawsuit to settle the matter
146
Order to Vacate
Order setting aside judgment from the court
147
Ride Through
When creditor allows debtor to keep collateral by simply making payments without submitting a reaffirmation agreement
148
Going to Jail for a Debt
- Debtor must attend an exam (if ordered) or be in contempt of court
- Creditor cannot threaten debtor with jail time (violation of FDCPA)
149
Mini-Miranda and FRE 408
Settlement negotiations between debtor/creditor are not admissible in court
150
Consequences of Chapter 7
- Cant file chapter 7 again for 8 years
- Remains on credit report for 10 years
- Co-signors still liable
- Doesn't eliminate liens
- Income limits (means test)
- Loss of luxury items
151
Chapter 7 Timeframe from Start to Finish
4-6 months
152
Waiver of Bankruptcy Filing Fees
- Income must be below 150% of federal poverty guideline
| - Otherwise fee can be paid in up to 4 installments
153
Priority Creditors (examples)
- Back taxes
- Child support/alimony
- Employee wages/retirement plan contributions (if debtor is an employer)
154
Ineligible for Chapter 13 Discharge (Prior Cases)
- Received chapter 7 discharge in 4 years prior to 13 OR
| - Received chapter 13 discharge in 2 years prior to 13
155
Length of Chapter 13 Plan
- If CMI equal/greater than median income = 5 years
| - If CMI equal/less than median income = 3 years
156
Debts paid in full via 13
- Priority debts
- Mortgage arrears
- Bankruptcy fees
- Secured debts
157
Calculating Odds of Losing Home
Start with the fair market value of your home and subtract the following:
- Homestead exemption
- Trustee's commission on the difference (25% of the first $5,000, 10% of the next $50,000, and 5% of the rest, up to one million)
- Costs of sale (usually around 8% of FMV)
- Mortgages
- Liens secured by the home (such as a tax lien)
158
Non-exempt property and chapter 13
-Debtor can keep non-exempt property but they have to pay for the value of the non-exempt assets
159
Automatic Stay and DSOs
-Automatic stay does NOT apply to DSOs
160
DSOs and Chapters 7 & 13
- 7 = Doesn't pay arrearages but $ from sold non-exempt property will go towards paying the DSO
- 13 = monthly payments + arrears must be paid in full
161
Filing 13 Without Discharge
- Debtor still receives protection from the stay
- Debtor still gets benefit of a payment plan
- Debts must be paid 100% in full
- No discharge
162
Chapter 13 Payments (is interest charged?)
- Secured debt (with interest)
- Priority debts (without interest)
- Percentage of unsecured debts (without interest)
- Catch up on defaulted secured property
- Administrative expenses
163
How Long Does Chapter 7 Stay on Credit Report?
10 years
164
Time Between Chapter 7 Discharges
8 years
165
Calculating Equity (Liens)
DONT include liens that can be discharged in bankruptcy when calculating equity
166
Risk of Chapter 7 (Agreement)
When you file a Chapter 7 bankruptcy, you are agreeing that the bankruptcy trustee may sell all your non-exempt assets and distribute the proceeds among your creditors.
167
Michigan Homestead Exemption
$38,225 of equity in your home (or $57,000 for people over age 65 or receiving social security)
168
Debt and Social Media
Debtor collects/trustee WILL view social media for info on financial condition
169
Sole Proprietor in Bankruptcy
- Trustee will assume control of the business
| - Liquidation unlikely if business has few assets
170
Non-Filing Spouse's Income
Must be counted to the extent the non-filing spouse regularly contributes to household expenses of debtor and debtor's dependents
171
Current Monthly Income (SSI)
SSI is NOT INCLUDED in CMI
172
CMI Income (tax refunds)
Tax refunds are NOT considered income for CMI
173
CMI (unemployment payments)
Unemployment is NOT included in CMI
174
CMI (stimulus payments)
Stimulus payments are NOT included in CMI
175
LBR 5005-2
Stricken document amended to correct defect w/in 14 days is considered filed on the date the original was submitted
176
Nunc pro tunc
Used when court wants an order to be effective from an earlier date
177
Recovering Payments
Debtor CAN recover involuntary payments made 90 days prior to filing
Debtor CANNOT recover voluntary payments
178
Joint Debtor's and Exemptions
Joint debtor's may only use their own exemptions to protect individual property interests
179
Garnishment Calculation
the maximum amount of disposable earnings that may be garnished is the lesser of 25% of the disposable earnings for that workweek or the amount by which disposable earnings for that week exceed 30 times the federal minimum hourly wage
180
Eviction (pre-judgment)
Stay is in effect if landlord doesn't already have a judgment for possession (though lifting of stay will likely be granted)
181
Medical Bills as consumer debt
Medical bills are NOT considered consumer debt (thought might be if incurred for elective procedures)
182
Rental Income as Property of the Estate
- Rent is property of the estate 11 U.S.C. §541(a)(6)
| - Some of the income may be subject to a security interest if there is an outstanding mortgage on the property 552(b)
183
522(p)(1)
Debtor cannot exempt more than $125,000 in value in a primary residence that was acquired over the last 1,215 days
184
Reaffirmation Agreements and 524(c)(1)
- Agreements must be entered into prior to discharge
| - Debtor must receive required disclosures
185
IRS and social security benefits
IRS can offset Social Security benefits against debts owed to the federal government because its a "unitary creditor."
186
Lien Stripping and Chapter 7
Lien stripping a junior mortgage can only occur upon successful completion of chapter 13
187
Trustee Powers relative to Debtor's Powers
Trustee has no greater power to dispose of property than debtor's themselves (say if debtor had a fractional interest in property)
188
Aggregating Garnishment
1. Bank garnishes less than $600 in cash (not recoverable) but ALSO garnishes vehicle/property worth more than $600
2. Aggregate/add everything together and try to recover it all
189
Reaffirmation Timeline
Within 60 days of 341 meeting OR before discharge is entered
190
Michigan Homestead Exemption (doubling)
Homestead exemption cannot be doubled
191
Judgment Lien v Property Tax Lien
Property tax liens always have priority over judgment liens
192
Judgment Liens in Foreclosure
Judgement liens recorded after mortgage will be wiped out by the foreclosure
