Demystifying Bankruptcy Tex Ritter ERICSA. Bankruptcy 201 A bankruptcy primer for the advanced situations

  • View

  • Download

Embed Size (px)


  • Demystifying Bankruptcy Tex RitterERICSA

  • Bankruptcy 201A bankruptcy primer for the advanced situations

  • Demystifying BankruptcyDefinitionsLanguage of bankruptcyTypes of bankruptcyResourcesHistoryChild Support is First Priority Debt type

  • Bankruptcy is fun and easyDischarge/DismissalTrustees duties and obligationsDomestic Support ObligationAutomatic Stay in BankruptcyProof of ClaimTypes of Claims

  • Bankruptcy is fun and easyObjections to ClaimsObjections to PlansFailure to provide for current supportFailure to provide for child support arrears

  • Bankruptcy is fun and easySituationsEmployer files bankruptcyObligor files bankruptcyCustodial parent files bankruptcyNotification of Bankruptcy

  • Bankruptcy is fun and easyDischarge in bankruptcyDomestic Support obligations are not dischargedNotice to Withhold is authorizedNational Medical Support Notice is authorizedTax intercept, license suspension, credit reporting and passport denial are authorized

  • Bankruptcy is fun and easyFile a proof of claim? Or Not?Depends on the circumstancesLets make a deal Include unliquidated amounts (unreimbursed medical, child care, school expenses, recreational expenses if authorized by judgment or statute)

  • Bankruptcy is fun and easyObjection to ClaimObjection to Plan Relief from stayMotion to avoid a lienAdversary Proceedings

  • Bankruptcy 201

    Advanced BankruptcyComplex Proofs of ClaimVarious Child Support CategoriesMultiple CasesAdding Interest to arrearsBankruptcy is fun and easy

  • Proof of ClaimA claim is a right to payment. 11 U.S.C. 101 (5). (5) 'claim' means - (A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or

  • Proof of ClaimA claim in bankruptcy could be the right to collect unliquidated, but accrued, unreimbursed medical expenses or educational expenses or reimbursement of child care costs not yet reduced to a judgment.

  • 11 U.S.C. 101 (12A)'debt for child support' means a debt of a kind specified in section 523(a)(5) of this title for maintenance or support of a child of the debtor.

  • 11 USC Section 101(14A)Domestic Support Obligation is a debt owed to a spouse, child, parent of a child or a governmental agency in the nature of maintenance, support (including public assistance) or alimony.

  • 11 USC Section 362(b)(2)(C) Income Withholding, Notice to Withhold Income, Earnings Assignments Orders, National Medical Support Assignments do not violate the automatic stay. 362(b)(2)(G) Revoking a professional or drivers license does not violate the automatic stay.Reporting to credit bureaus does not violate the automatic stay. 362(b)(2)(E)

  • 11 USC Section 362(b)(2)(F)Intercepting a tax refund is not a violation.

  • Employer files BankruptcyNotice to Withhold not honoredWho gets credit?What not to doWho files the Proof of ClaimWages or Support

  • Advanced BankruptcyObjections to ClaimsPrima Facia filingObjection to Claim MotionThe ProceedingEvidence

  • Objection to Chapter 13 PlanThe Plan does not provide for the payment of supportObject to confirmationNegotiateChild Support is non-dischargeableNot proposed in good faithRequire amendment to Plan

  • Complex IssuesMotions to Avoid a lienRecordings are judicial liensChild Support Exemption

  • Violations of the StayAutomatic Stay in BankruptcyWhat to do?What not to do?

  • Adversary ProceedingsBankruptcy based law suit or legal proceedingCore proceedingsNon-core proceedings

  • Relief from StayAlter Ego ActionsPreferential TransfersFraudulent ConveyancesDiscovery

  • NegotiationsTypical scenarioYou receive Notice Chapter 13 filedContact Debtors attorneyNext step?File a Proof of ClaimDo not file a Proof of ClaimHow to negotiate

  • NegotiationsReview caseGood Pay/Bad PayNTW or income withholding order or wage assignments are allowed for current and arrearsIncome Ratios/Child Support ObligationTrustee's fees (10%)

  • NegotiationsModify Plan to allow for payment of child support and arrears outside of Plan (or part in Plan) and list debt as non-dischargeable Sent Notice to Withhold or Income Withholding Order or part NTW and part Proof of Claim for arrears (with knowledge and consent of debtors attorney)

  • Bankruptcy is fun and easyProcedureTelephonic hearings are authorizedElectronic filing is required, electronic docketing may be required

  • Bankruptcy is fun and easyIn re Garrett (E.D. Tex 2005) 315 B.R. 431 In re Charnock (9th Cir. BAP 2004) 318 B.R. 720In re Cervantes (9th Cir. 2000) 219 F.3d 955In re Lebowitz (9th Cir. 2000) 217 F.3d 799

  • Bankruptcy is fun and easyIn re Coker (C.D. CA. 1998) 232 B.R. 182In re Pacana (9th Cir. BAP 1991) 125 B.R. 19 In re Donald Clifford Foster (9th Cir. 2003) 319 F.3d 495In re: Wayne K. Crawford (7th Cir. 2003) 324 F.3d 539In re Gruntz , 202 F.3d 1074 (9th Cir. 2000)

  • Bankruptcy Exercise

    Discuss case optionsYes Yes Yes Yes Yes Yes

    SituationChapter 7 91113You can continue to collect child support.YesYou can continue to collect arrears.NoRelease a licenseOnce the Petition in Bankruptcy is filed, you can send a wage assignment.YesYou must release a property lien that was filed prior to the debtors filing for bankruptcy.NoNoNoNo

  • Bankruptcy Exercise

    .A A A A Yes Yes Yes Yes Yes Yes Yes Yes

    SituationChapter791113Repossessions are allowed.You can continue action to establish paternity.You can use a Civil Contempt proceeding to enforce the payment of debt.An action to modify support is not affected by filing of a bankruptcy.

  • Bankruptcy Exercise

    Yes Yes Yes Yes No No No No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

    SituationChapter 7 91113Credit reporting is allowable.You can file or record an Abstract of Support Judgment.You cannot negotiate an SLMS stipulation or inquire about payment on arrears.You cannot contact the debtor to find out when the next payment will be made.If the debtor requests a lien be lifted, refer the debtor to the bankruptcy court.

  • Bankruptcy is fun and easyThank you!Thank ERICSA!Please fill out your evaluation formsEmail if you have any