October 2011


31 Oct Charlie Brown, the Great Pumpkin, and the Bankruptcy Court

There's something about Halloween that makes children and adults alike feel good. Maybe it's the costumes, perhaps it's the candy. One thing's for sure - there are few people who don't smile when screaming, "Trick or treat!" Of course, there's always the errant egging or toilet papering of the trees in front of the house. Even the theft of vandalization of a mailbox. But those are few and far between, more the result of teenagers than those in it for the candy. And who can forget poor Charlie Brown? His friend sat out all night waiting for the Great Pumpkin, and all poor Chuck got was a rock for his trick-or-treat efforts. We would expect nothing less (more?) of him, what with all the football snatching shenanigans that had come before. Come November 1, 2011 - one day after Halloween - the American consumer will get a proverbial rock as well. As if the economy wasn't bad enough already, here comes more bad news from the U.S. Bankruptcy Court.
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28 Oct Chapter 13 Bankruptcy, Social Security and In Re Vandenbosch

In Re Vandenbosch answers the question of whether a Chapter 13 Debtor must include their social security benefits in the determination of monthly income in Southwest Florida. In the past, debtors were required to use their social security to repay creditors claims in their bankruptcy plans. This was a very unfair practice in my opinion, and therefore, The Dellutri Law Group decided the issue needed to be heard by an appellate court. In a very recent opinion, Judge Steele of the U.S. District Court in Fort Myers, Florida overruled the Bankruptcy Court decision to include Social Security Benefits into Disposable Monthly Income. In the case of In Re Vandenbosch, one of the issues on appeal was whether a debtor who receives social security benefits must include those benefits as part of their income in the determination of available monthly income. Judge Steele ruled that a Chapter 13 debtor does not have to include their social security benefits in the calculation of monthly income.
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bankruptcy planning

26 Oct Why Failing To Plan Is Planning To Fail In Bankruptcy Court

If you are considering filing abankruptcy petition you should consult with an experienced lawyer so you can do some planning. But you should be careful; as with most of life, good planningwill save you money but sloppy planning can land you in hot water. I often talk with people who are considering bankruptcy who have already tried to do some planning on their own. They sold their car to a friend for ten dollars, or quit claimed their property to their spouse thinking that was the only way to protect it. Sometimes theyused their tax refund to pay off a loan from a relative, or "settled" a debt with one creditor. Other times they borrowed from their retirement or took out a home equity loan to try to forestall the inevitability of having to file. These are things you should NOT do before filing.
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25 Oct Bankruptcy Exemptions: The Wages of Benn (Part III)

In the on-going saga of Missouri bankruptcy exemptions, some apparently-settled debtor protections have recently been destabilized. And this caused an apparent split among bankruptcy judges on at least some of these protections. Recently, this on-going evolution visited the daily wages of consumers. Missouri has a law which protects a large portion of an individual's income from her own services from collection by creditors, often called the "wage" exemption. It is similar to a federal law which sets the outside maximum a creditor can garnish from personal income. In years past, the U.S. Supreme Court has held that the federal law is not intended as an exemption in a bankruptcy case. And some states have followed this as to their own "wage" protection laws. But as we know, states can make their own laws about exemptions to be used in bankruptcy. And Missouri has opted to go the other way.
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25 Oct Bankruptcy Filings Decrease: Why? Shelter, Food, and Necessities of Life

Bankruptcy filings continue to decrease according to a report by Epiq Systems in a recent article at Credit Slips by Bob Lawless. According to the blog, bankruptcy filings are down more than 17% from 201o at the same time last year. This trend was reported in an earlier article at the New York Times. Since unemployment rates are still high and foreclosures continue to rise (up 23% from 2008), one might wonder why the decrease in bankruptcy filings? My colleague Cathy Moran recently wrote about investing in bankruptcy as a tool to regain control of a debtor's financial future. Cathy is absolutely right -- when the time is right. My recent experience with folks coming in for consultations is that folks are too broke to even consider filing for bankruptcy--their unemployment has run out, the mortgage company isn't foreclosing, and there is nothing for creditors to seize, even if a lawsuit is filed--no property, no money in bank accounts, no valuable assets, no wages, no land. My advice to these folks is
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