Consumer Bankruptcy Committee

ABI Committee News

The Blind Leading the Blind: Section 1329 and Chapter 13 Modifications

by: O. Max Gardner, III
Law Offices of O. Max Gardner III PC; Shelby, N.C.

The more I look at the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the more I am beginning to think that we have all been misled by those who either did not know or did not care to know any better.  During the past 20 months, we have been bombarded with questions about whether “projected disposable income” (PDI) is an historic fact or a future prediction.  We have been puzzled and perplexed by Form B22C and disposable income (DI).  We have wondered what Congress really intended when it adopted the IRS expense standards, which the IRS created solely for determining how much a taxpayer could pay in working out offers of compromise for tax debts. Compare In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006) (applies both PDI and DI), and In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006) (ignored B22C for substantial drop in income by AMI debtors), with In re Alexander, 344 B.R. 742 (Bank. E.D.N.C. 2006) (the concept of DI as we knew it has changed), and In re Barr, 341 B.R. 181 (Bankr. M.D.N.C. 2006) (an above-median income (AMI) debtor with negative DI on Form B22C could file a good-faith plan paying less than the surplus net monthly income shown on Schedule J).

Read the full article.

Bankruptcy: How Does It Affect Immigration Status?

by: Patrick D. O'Neill
O'Neill & Gilmore, P.S.C.; San Juan, P.R.

The purpose of this article is to alert the bankruptcy practitioner to the minefields lurking in U.S. immigration law that may adversely affect potential clients who are lawful permanent resident aliens or nonimmigrant aliens living and working lawfully, but temporarily, in the United States.  If a noncitizen seeks relief under the provisions of the U.S. Bankruptcy Code, he or she must be aware that certain provisions of the U. S. Immigration and Nationality Act (INA), 8 U.S.C. §1101 et seq., may have a direct bearing on his/her immigration status and ability to remain in the United States lawfully.  In fact, if the bankruptcy proceedings reveal certain types of conduct not sanctioned by the immigration law and regulations, the noncitizen may be subject to removal from the United States and be unable to return for years (and in certain cases, for life).

Read the full article. (Materials from the 2007 Caribbean Insolvency Symposium)

Is Florida Still a Debtor’s Haven on the Eve of Bankruptcy?

by: Sonia Colon
O’Neill & Borges; San Juan, Puerto Rico

In In re Kaplan, 331 B.R. 483 (Banker. S.D. Fla. 2005), the court held that the “homestead cap” of $125,000 set forth in §522(p) of the Bankruptcy Code, as amended by §322 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), applied to the equity a debtor acquired in a home during the 1,215 days prior to filing a bankruptcy case. Florida and Puerto Rico attorneys will take particular note that in the past, many debtors have converted nonexempt assets into cash and invested the proceeds into homestead properties in Florida to protect their assets from an imminent bankruptcy case.

Read the full article. (Materials from the 2007 Caribbean Insolvency Symposium)

Bankruptcy Issues for Nonbankruptcy Attorneys

by: Hon. Judith K. Fitzgerald
U.S. Bankruptcy Court; Pittsburgh

Hon. Enrique S. Lamoutte
U.S. Bankruptcy Court; San Juan, P.R.

Hon. Robert A. Mark
U.S. Bankruptcy Court; Miami

Hon. Brian Tester
Tiffany & Bosco P.A.; Miami

Sonia Colon
O’Neill & Borges; San Juan, P.R.

The revisions contained in BAPCPA are clearly intended to protect recipients of support and alimony. One of the most significant changes is a newly created Bankruptcy Code term called “Domestic Support Obligation,” which is defined to encompass all debts for alimony, maintenance or support that accrue before, during or after the time the bankruptcy case is filed. As you will see, in enacting BAPCPA, Congress has given the bankruptcy court an expanded role in the enforcement of collection of support obligations.

Read the full article. (Materials from the 2007 Caribbean Insolvency Symposium)