What’s the bankruptcy trustee looking for when you submit your bank statements before the 341 meeting? Let me tell you what the trustee isn’t looking for: trustees don’t care if you bought the premium brand of coffee; paid for your kid’s sports team; fixed broken appliances; went on vacation; or bought concert tickets. No part of the Bankruptcy Code makes those expenditures meaningful. Disclosure is the name of the game Trustees essentially want to know that your bank records generally match the information you provided in the schedules you filed with the court. Do your deposits generally ma ..read more

“I want to file bankruptcy for my business, but I don’t need a personal bankruptcy”. I’ve had 2 such calls to my law office in just the last week. And in each case, bankrupting the business corporation will not solve the debt situation. Here’s why. The underlying problem is that the individual owner is personally liable for many of the business debts. Whether the corporation just shuts down, or files a Chapter 7 bankruptcy, the exposure of the individual remains. And only individuals get a discharge in Chapter 7. How does that happen, you ask, when you incorporated to shield yourself from the ..read more

Bankruptcy’s means test is a paper tiger in the San Francisco Bay Area. Really! You can see why few Bay Area residents are constrained by the means test when you compare the latest median income figures  used in the means test with the allowed cost of rental housing here. To review:  Congress  in 2005 tried to write a universal formula to limit bankruptcy relief to those who “needed” it. Bankruptcy judges were to be stripped of discretion in favor of a formula that would be universal. Those whose average income in the past six months exceeded the median for their ..read more

How long  does it take to recover  from bankruptcy? I started to answer the client’s question before I realized that the question was all backward. Recover FROM bankruptcy?  No…. It should be: recover  THROUGH bankruptcy! Bankruptcy is the tool for recovering from impossible financial situations. The ailment is debt: bills in excess of what you can pay off in a reasonable time and meet the rest of your family’s needs. Bankruptcy is the medicine that starts your recovery. The side effects of bankruptcy Bankruptcy may seem like a bitter pill, but lots of that is in your head ..read more

For a layman filing a bankruptcy without a lawyer, he didn’t do too badly. He got credit counseling and filed the certificate. He completed the schedules fairly well. He even filed a pro se adversary proceeding to enforce the automatic stay when the foreclosure on a multi million dollar property went forward despite the bankruptcy. But the one thing he didn’t know and didn’t provide for was an extension of the automatic stay. Turns out, he’d filed another bankruptcy case within the 12 months prior to the present case.  That case had been dismissed. So, the automatic stay, one of the defi ..read more

If the truth will make you free from your debts, your creditors are motivated to lie about bankruptcy. After all, if you think there is no alternative to making payments to them forever, you’ll keep filling their pockets each month. So, there’s no upside for a creditor in feeding you good information about bankruptcy. After all, if you understood how bankruptcy could make your financial life manageable, you wouldn’t continue paying on debt you’ll never pay off. Who lies about bankruptcy Lying about bankruptcy law isn’t confined to creditors.   Debt settlement companies and debt managemen ..read more

You must “tell the truth” on your bankruptcy paperwork, bankruptcy advice sites intone. Most of us shrug that off: we can’t imagine deliberately lying to a court. But carelessness about bankruptcy schedules abounds. If you give the bankruptcy paperwork just a lick and a promise, the resulting schedules aren’t truthful, not because of lies, but because they aren’t complete. Carelessness has consequences When the debtor doesn’t take the time to consider all his legal rights and intangible assets;  when he makes assumptions about what the law covers; and when he includes only the debts that ..read more

Fear of bankruptcy is both common and necessary. Those who aren’t living the American dream of upward mobility and financial security seem to think that’s a matter for shame. Perhaps the second most frequent question would-be clients ask me is whether the fact that they filed bankruptcy will be in the paper, disclosed to their employer, or discovered by their family or friends. [The answer is that it’s unlikely.] They are paralyzed by what they perceive as shame in not being a financial success in a world that too often confuses money with virtue. The bankrupt are better off A couple of obj ..read more

If I’ve used credit cards before filing bankruptcy, do I have to wait? Too many people considering filing think there is some sort of waiting period between financial activity and filing bankruptcy. So, let’s look at the issues in play surrounding recent credit card charges and seeking bankruptcy relief. There’s no 90 day rule Everyone talks about a 90 day rule in bankruptcy. The rule, as reported, is that you can’t buy anything, or maybe, can’t pay anyone, or charge anything. Not so. The only 90 day rule in bankruptcy applies to creditors, not debtors. Nothing in bankruptcy law or practice r ..read more

Worried that a bankruptcy trustee will examine your sitution and somehow disqualify you from bankruptcy because of something you did (or didn’t do) right before you filed? Not to worry. Your bankruptcy discharge does not depend on the trustee’s approval of your money choices in the run-up to bankruptcy. There is no subjective do-we-approve-of-the-debtors-money-management test to get a discharge.  The bankruptcy system makes no subjective judgments about how you’ve lived your life before filing. What’s important is something else, entirely. What trustees look for Trustees routin ..read more