April 2012

30 Apr Can A Chapter 7 Debtor Re-Affirm A Lease?

Recently there was a case where several debtors asked a Bankruptcy Court to approve a lease agreement as if they were re-affirmation agreements. From a procedural standpoint re-affirmation agreements require Bankruptcy Court intervention and lease assumptions do not, and therefore, the Courts denied this process. In the past, several Bankruptcy Courts allowed this process, but in the recent case of In Re Perlman, Judge John K. Olson of the Southern District of Florida argues against the idea of seeking Court approval of lease agreements. Judge Olson believes that the process of seeking Court approval of Lease Agreements is a waste of the Court's time and resources and the Clerk's office's time and resources. Let's start with lease assumptions. Under the Bankruptcy Code 365(p)(2), the debtor can offer to assume a lease. The lessor must decide whether it wants to enter into the lease assumption agreement. If the lessor does not want to continue in the lease, it can do nothing and the lease will be deemed rejected and any debt associated with the lease will be discharged. If the lessor decides that it would agree with the debtor assuming the lease, it will contact the debtor and terms will be negotiated.
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30 Apr Divorce during Bankruptcy

One of the leading causes of marital conflict involves money, or lack thereof. If you and your spouse filed a joint bankruptcy and you are now considering divorce, your respective financial positions may be at odds with each other. One person may want the house, one may not. Both may want the same vehicle. Who will pay, who will not. Think about that for a moment, if you cannot agree to get along in marriage, will you be able to agree to do the things necessary to complete your case after you divorce. This situation places the attorney squarely in a potential conflict of interest between both spouses. An attorney cannot serve two masters. [caption id="attachment_28861" align="alignleft" width="176" caption="Conflict resolution"][/caption] This conflict does not exist if only one spouse is represented in bankruptcy unless the attorney also has an attorney client representation arrangement with the other spouse on some other matter. In a joint bankruptcy case, the attorney represents both parties. That attorney cannot ethically pick and choose sides or plan strategy favoring one client against the other. Even if you only want a simple question answered, a conflict of interest prevents the attorney from providing one spouse advice that could hurt the other spouse. So what do you do?
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27 Apr How to Afford Bankruptcy

Bankruptcy can be affordable. It requires a lot of money to file for bankruptcy protections. It costs lots more than before the 2005 revisions, which doubled the expenses and work for no additional benefit. Here’s how to make it affordable. Chapter 7 cases are over in three...

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