The primary difference between Chapter 7 bankruptcy and Chapter 13 is that under Chapter 13, the debtor(s) is required to make payments for the benefit of unsecured creditors during the term of the plan. The term of a plan or “applicable commitment period”  ranges in time from 3 to 5 years.  One factor in determining the length of the plan is the “median income” of the debtor or debtors in the case of a married couple. Other factors include the ability of the debtor(s) to make affordable payments and the “best interests of creditors” test. Under that test, the debtor(s) is required to pay the unsecured creditors an amount equal to the value of their “unexempt assets” or the value of assets that cannot be…

In Bullok v Bankchampaign NA, the US Supreme Court clarified the term “defalcation” as that term is used in 11 USC 523(a)(4) which provides that a debt is not discharged “for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” Resolving a conflict among the Circuit Courts, the Bullock Court held that the term “defalcation” in the Bankruptcy Code includes a culpable state of mind requirement involving knowledge of, or gross recklessness in respect to, the improper nature of the fiduciary behavior. Our State of the Art Computer system allows us to serve all of the Counties and Cities in the North East Michigan including: Saginaw (Saginaw, Frankenmuth, Chesaning, St. Charles, Hemlock, Shields, Freeland, Carrollton ); Bay (Bay City, Essexville, Auburn, Kawkawlin, Linwood,…

The Sixth Circuit Judicial Council is soliciting applications from persons interested in appointment as United States Bankruptcy Judge for the Eastern District of Michigan at Detroit. This position will become vacant upon the retirement of United States Bankruptcy Judge Steven W. Rhodes effective December 31, 2013.

Effective April 1, 2013, new median income data will be used for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy proceedings. Remember that means testing is based on household size. In Michigan, here is the new data: 1 –  $45,029;  2 – $52,621; 3 – $61,715; 4 – $73,864* *For cases filed on or after April 1, 2013, add $8,100 for each individual in excess of 4. Here is the direct link to the new data:   http://www.justice.gov/ust/eo/bapcpa/20130401/bci_data/median_income_table.htm The home page for means testing data is: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm  

The Michigan legislature changed the law on wage garnishments. Effective September 2012, a writ of garnishment for wages, salary, commissions or other earnings remains in effect for 182 days. Keep in mind that the Automatic Stay provision of both Chapter 7 and Chapter 13 Bankrtuptcy law, stops garnishments immediately upon filing the petition. And under the Preference provisions, you can recover any monies that are garnished within 90 days of your filing.

With every initial consultation,  I always ask about whether you transferred any interest in any property. What I am really trying to find out is whether or not your engaged in what is known as a “fraudulent transfer.” Under §548 of the Bankruptcy Code, a transfer is defined as any of the following: 1.         The creation of a lien; 2.         The retention of title as a security interest; 3.         The foreclosure of a debtor’s equity of redemption; or 4.         Each mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with – property; or an interest in property. This a list of the more common transfers that occur in the bankruptcy context: Gifts, Creating a lien to secure a debt,…

Yes. When a creditor or other interested party seeks an order from the court abandoning property from the bankruptcy estate under Code § 554(b), Bankruptcy Rule 6007(b) supplies the mechanism for the party to obtain that order. The rule provides that the party’s objective can be accomplished only by “fil[ing] and serv[ing] a motion requiring the trustee or debtor in possession to abandon property of the estate.” Therefore, when a party files a motion for abandonment pursuant to Rule 6007(b), the party is, in fact, asking the court to compel the trustee to abandon property from the estate. Since a trustee, in turn, may abandon property only after affording notice to all creditors as mandated by Rule 6007(a), it follows that a party petitioning under…