Consumer Bankruptcy

This panel will feature a roundtable discussion with bankruptcy judges from the Ninth Circuit and across the country. The judges will share their thoughts and perspectives, as well as take questions from the audience, on topics of current interest in both business and consumer cases.

Panel will provide an overview of the intersection between bankruptcy and family law. The discussion will include the effects on property of the estate when one spouse does not file, community and separate property issues, scope of automatic stay, collection against non-debtor spouse, and other related family law issues as they intersect with bankruptcy.

This annual favorite will cover all recent bankruptcy law decisions and current consumer bankruptcy law issues, and is a must-attend for professionals to stay current on consumer bankruptcy law issues.

The chapter 13 debtor’s plan is expiring, and the trustee issues a notice of final cure payment and completion of plan payments. Your client tells you it’s wrong and says there are uncured pre-petition and post-petition defaults, escrow shortages and unpaid attorney fees. What do you do? This session will cover understanding Federal Rule of Bankruptcy Procedure 3002.1 and Local Bankruptcy Rule 2015-3 (E.D. Mich.); reviewing all notices of payment changes, fees and expenses; comparing records with the trustee and debtor, and obtaining discovery; the proper procedure to file and prosecute responses disagreeing with notice of final cure payment; case law regarding remedies under Federal Rule of Bankruptcy Procedure 3002.1(i) for failure to comply with the rule’s requirements; and implementing steps to comply with the discharge order.

It is not uncommon for issues to arise in consumer cases after they are filed regarding pre-petition and post-petition tax liabilities. To make sure that a client understands the possible outcome of these issues and is not surprised when they crop up after the bankruptcy petition is filed, it is imperative that debtor’s counsel alert and counsel the debtor about these potential issues before the petition is filed. What tax clams are nondischargeable? What constitutes a tax return for purposes of § 523? What is a tax transcript, how can one get one from the IRS, and how does one interpret what it says? This session will also focus on understanding the implications of unfiled returns and substitute returns, especially the current split among the circuits regarding late-filed returns and their consequences for determining dischargeability, distinguishing the treatment for secured, priority and general unsecured claims in chapters 7 and 13, interest on secured or nondischargeable tax claims, and advising the client as to whether chapter 7 or 13 is the best course of action to deal with the debtor’s tax liabilities.

Determinations of values are central to virtually every aspect of a consumer bankruptcy case. How should debtors value assets on their schedules? What should they rely on for value, and what is their attorney’s role and responsibility? When are appraisals needed? What weight is given to BPOs and tax statements? What can creditors and trustees do to challenge the debtor’s values? What quotient of evidence do debtors, creditors and trustees need to litigate the value of a creditor’s collateral, a residence in a chapter 13 lien-strip, or a contested abandonment of property in a chapter 7 case, a contested redemption or a contested exemption?

This session will focus on the increasing number of senior citizens filing for bankruptcy. Why are so many elders now filing? What unique challenges do they present? Do their Social Security benefits and pension incomes become available to fund chapter 13 plans? How are reverse mortgages treated in chapters 7 and 13? What happens when an elderly debtor passes away during a chapter 7, 11 or 13 bankruptcy case? What if there is a surviving spouse who is also a joint debtor?

Even beginning creditors’ attorneys know that the automatic stay prevents them from enforcing their clients’ rights to their collateral. But what can they do in chapter 7 and 13 cases, and when should they do it? This session will focus on the basic legal issues facing secured creditors in these consumer cases and the development of effective and economical strategies for dealing with them. What are the legal standards to obtain relief from the automatic stay? What do the Federal Rules of Bankruptcy Procedure and the local bankruptcy rules require as attachments? What must the motion allege, and who has the burden of proof if an objection is made? Do these standards differ in chapters 7 and 13? When is the right time to bring a motion to lift a stay in a chapter 7 or 13 case? Should you seek to have a chapter 7 debtor reaffirm your debt? If a chapter 7 debtor doesn’t reaffirm but just keeps making the payments, what should you tell your client to do? How does § 365(p) work, and do you need to have the court involved? Loan modifications are common in chapter 13, but is there such a thing as a loan modification in a chapter 7? Can the court reopen a case to approve a post-discharge reaffirmation or loan modification in chapter 7? Can a chapter 13 debtor force your client to take property they don’t want by surrendering the property or vesting it in your client?

This session will focus on debtors’ attorneys’ pre-bankruptcy advice and planning regarding the protection of a debtor’s assets, including maximizing exemptions without getting into trouble, analyzing and counseling the client on the vulnerability of transfers of property that the debtor already made to family members or trusts before seeking your counsel, permissible actions to mitigate liabilities on account of a debtor’s pre-petition transfers, what can legitimately and ethically be done to enable debtors to maximize their exemptions without jeopardizing their discharges, and the use of family trusts, self-settled trusts and the effect of the new Domestic Asset Protection Trust Act in Michigan.