Exemptions In Bankruptcy

31 Oct A Corporation Will Not Protect You from the Trustee

Recently, a well-dressed, well-spoken person came to my office to discuss filing for bankruptcy. A quick review of claims by creditors revealed several lawsuits and an assortment of credit card debt. There were two mortgages and two car loans. Even though both husband and wife were working, the total monthly income was barely enough to cover the monthly expense. The house and the cars had no equity in them, the bank accounts were empty, retirement funds were dry. No assets and little income and total unsecured debt of about $150,000. It would seem to be an easy Chapter 7 bankruptcy case, right?


This individual was self-employed. When I asked what the business was worth, the response was "Why? Its a corporation, no one can touch that - it's incorporated." "How much of the corporation do you own?" The answer, "50%". "What would the corporation be worth if you sold it?" The answer, "about 1.5 million dollars, but no one can touch it 'cause it's incorporated." "Really,........"

Read More

27 Oct Is The Cash Value of My Life Insurance Policy Protected If I File Bankruptcy in New York State?

Until recently, it was unclear whether cash value in a life insurance policy was protected if a joint bankruptcy was filed in New York State. Up until about a year or so ago, it wasn't an issue. The cash values of life insurance policies were...

Read More

19 Oct Ten Things I’d Change About BAPCPA-Part Two

In this series, I'll consider the possibility of changing some of the provisions of BAPCPA, to eliminate some of the foolishness, and promote efficiency and economy in both the court and my practice.  In Part One, I suggested eliminating the requirement for credit counseling when foreclosure is pending. Second on my wish list is a simplification of provisions which determine the applicable exemption scheme in any particular case.
Read More

12 Oct Automobile Accident Claims in Bankruptcy: The Often-Overlooked Federal Personal Injury Exemptions

In consumer bankruptcy cases where the debtor has an unresolved personal injury claim, or no-fault insurance claim, arising from an automobile accident, don't forget to utilize all available sections of the federal bankruptcy exemptions to protect the debtor's right to compensation. Sections 522(d)(10) and 522(d)(11) contain a veritable gold mine of exemptions which are often overlooked by debtors' attorneys. If you have an automobile accident-based personal injury case and are filing bankruptcy, read these sections carefully with your attorney. You'll be glad you did. The obvious exemption, 11 U.S.C. section 522(d)(11)(D), is a no-brainer and is rarely missed by anyone. This section authorizes the exemption of $20,200 of proceeds for a personal injury claim, excluding pain and suffering or actual out-of-pocket losses (careful drafting of the settlement papers, if any, is therefore necessary). It is the other exemptions that are sometimes overlooked.
Read More