Presto Chango The Rules Have Changed Again!

On October 17, 2005 the world of Bankruptcy changed forever with the commencement of BAPCPA. Until recently in the Western District of Missouri we thought that interpretation of the new changes were somewhat settled and agreed upon. Then just about the time you get comfortable, things up and change again.

Debtors will enter my office bewildered and befuddled when I use my standard answer: “I don’t know” to their questions. Why, you may ask is this my standard answer?

The truth is new case law is issued almost everyday of any given work week. What this means for you as a debtor is that what your attorney tells you is the local practice may only be true for that very moment in time. If you are in a Chapter 13 and it takes six months for your case to be confirmed and a new case is issued during that time, your case may not be confirmed because of the new opinion that has been issued.

Let me give an example. In the Western District of Missouri, if you were filing a Chapter 13 and were surrendering a $30,000 vehicle, I could use that vehicle in the means-test to reduce the payment to the unsecured creditors. However, on or about December 20, 2007, Judge Venters issued the opinion of In re Burden that prevented you from using that surrendered debt for the means-test. The crazy thing about In re Burden is that it overruled Judge Federman’s opinion of In re Gress.

Both Judge Federman and Venters are in the Western District of Missouri as well as Judge Dow. I appear in front of all three of these Judges and have great admiration for them across the board. However, I feel as though I am plotting my way through a mine field some days because you never know what opinion will be issued next that could blow up a current non-confirmed Chapter 13 or force your debtor from a Chapter 7 into a Chapter 13.

What does this mean for you if you are not in the Western District of Missouri? The bottom line is the law is not stagnant in nature. It is called the practice of law for reason. The reason is that the judges, the lawmakers and the trustees are human and no two humans will be exactly alike in their thought process. Hence, five attorneys can look at the same fact pattern and interpret it five different ways.

So what can you do as a debtor to be prepared for the ever changing landscape in bankruptcy? Be prepared! Do what your attorney asks you to do. Disclose, disclose, disclose so your attorney can properly evaluate your case. Attorneys are like physicians. We can not properly evaluate your case without all the facts as well as your physician cannot property diagnosis you unless you tell them exactly what is wrong.

Finally, take an interest in your own case and financial future. Almost every Bankruptcy Court website will have a link to the Judge’s Opinions. Take an afternoon and read the opinions that are being issued in your area so you will be aware of issues that may affect your case.

Knowledge is power and it has the ability to stabilize the ever changing landscape in the Bankruptcy Court. But it knowledge is just like anything else. We can lead you to the place gain the power but the final choice is up to you!

Written by Rachel Lynn Foley.