Chapter 7 Bankruptcy

04 Sep Health Savings Accounts Not Exempt in Bankruptcy

A health savings account (HSA) belonging to a Mounds View, Minnesota, police officer was not exempt in bankruptcy, the 8th Circuit Bankruptcy Apellate Panel ruled. The appeals court upheld the bankruptcy court's order thatin Minnesota, anHSA is property of the bankruptcy estate pursuant to 11...

Read More

06 Aug Chapter 7 Debtor Waits Four Years for Trustee to Release his Money

chapter 7 trustee delaysYou may be wondering what happens if you file Chapter 7 bankruptcy and you own assets that cannot be exempted or sheltered under the applicable exemption laws in your district. There may be instances where you need to file bankruptcy to stop a pending lawsuit but you do not have the income to support a Chapter 13. Chapter 7 functions as a liquidation type of bankruptcy. While it is true that most Chapter 7 debtors have no assets to liquidate (because those assets fit within the exemption provisions of the bankruptcy laws) there are some cases where the Chapter 7 trustee must function as a liquidation asset. A client of mine here in Atlanta faced this situation several years ago. He was employed at a relatively low paying job but had well over $50,000 in credit card and other unsecured debts. After we filed, my client discovered that he was a beneficiary of his great aunt’s estate - his portion was just over $20,800. Under the Georgia exemption law, my client had a potential “wildcard” exemption of $5,400. We had used up $3,200 in the original filing, meaning that there was $2,200 of the exemption left. I filed an amendment to Schedules B and C of his petition to declare the $2,200 as exempt. This meant that my client would participate in the liquidation of the bankruptcy estate.
Read More

14 Jul 7th Circuit Splashes Cold Water on Chapter 7 “Lien Stripping” Hopes

Over the past dozen or so years, the bankruptcy process known as chapter 13 lien stripping has become universally accepted by the courts. Recently, advocates of lien stripping have expanded their efforts in the next logical direction: gaining judicial recognition of lien stripping in chapter...

Read More