by Matt Dunaway on December 9, 2010
For many people, one of the most frightening aspects of bankruptcy is going to court.
What’s going to happen? Who will be there? Will I be asked embarrassing questions?
Here are 10 things you need to know about your bankruptcy court date:
1. Don’t expect to see the Judge. If you file Chapter 7 Bankruptcy, you will probably never see the Judge. A “Bankruptcy Trustee” (he’s just a lawyer appointed by the court to administer your case) will ask you four or five simple questions at your hearing.
2. Your bankruptcy lawyer will be at the hearing with you. He’s there to guide you through the process and make sure everything runs smoothly.
3. You will be at court for about an hour. Most of this time, you will be waiting so bring a magazine or book. Your part of the hearing will last only a few minutes.
4. No one is going to be rude or mean to you.
5. Your creditors probably won’t be at the hearing. Sometimes, a secured creditor might be at the hearing to see if you want to reaffirm the debt.
6. You will pass through a metal detector, so “travel light.” Leave as much stuff in your car as possible.
7. Bring a picture ID.
8. Do NOT bring a gun, knife, scissors, nail file, etc…
9. Dress “normal.” You’re not going to church, but you’re not going to a night club either, so….
10. Relax. If you’ve been truthful with your bankruptcy attorney and he’s done everything he should do, your court hearing will be “a piece of cake.”
Email This Post
Print This Post
by Matt Dunaway on July 4, 2010
May a debtor claim an ownership expense deduction under the means test if the vehicle is unencumbered? The Supreme Court will hear a case on this issue to resolve a split in the circuits; well, not a 50/50 split, but the usual split…the 9th Circuit versus everyone else.
Pre-BAPCPA, this would be a simple issue…if the debtor has an expense, then the debtor is allowed the deduction, as long as it does not breach the subjective test of “substantial abuse”; a subjective test based on “real” objective figures. In 2005, BAPCPA introduced the “means test”, an objective test based on contrived (i.e.- “fake”) figures.
Stephen Saser’s article in the June 2010 issue of the ABI Journal, “Supreme Court to Decide whether Means Test Allows Deduction for Unencumbered Vehicles”, expertly details the issues involved. Much hangs on the definition of “applicable.” The Ninth Circuit defined “applicable” in In re Ransom, 577 F.3d at 1030-31 as follows:
The ordinary, common meaning of “applicable” further impels us to this conclusion. ”Applicable,” in its ordinary sense, means “capable of or suitable for ebing applied.” Given the ordinary sense of the term “applicable,” how is the vehicle ownership expense allowance capabale of being applied to the debtor if he does not make any lease or loan payment on the vehicle? In other words, how can the debtor assert a deduction for an expense he does not have? If we granted the debtor such an allowance, we would be reading “applicable” right” out of the Bankruptcy Code.
The Seventh Circuit reached a completely opposite view of “applicable” when it said:
Section 707(b)(2)(A)(ii)(I) is more strongly supported by the language and logic of the statute. In order to give effect to all the words of the statute, the term “applicable monthly expense amount” cannot mean the same thing as “actual monthly expenses.” Under the statute, a debtor’s “actual monthly expenses” are only relevant with regard to the IRS’s “Other necessary Expenses;” they are not relevant to deductions taken under the Local Standards, including the transportation ownership deduction. Since “applicable” cannot be synonymous with “actual,” applicable cannot reference what the debtor’s actual expenses is for a category, as courts favoring the IRM approach would interpret the word. We conclude that the better interpretation of “applicable” is that it references the selection of the debtor’s geographic region and number of cars. (In re Ross-Tousey, 549 F.3d at 1158)
Hopefully, the Supreme Court will clarify the term “applicable” and help to make some sense of a poorly drafted bill. Until then, bankruptcy lawyers should be familiar with how their judges and trustees view this issue.
Email This Post
Print This Post
