Bankruptcy Schedules

What Are the Bankruptcy Schedules, Anyway?

Bankruptcy Schedule CThe bankruptcy schedules are the primary forms that debtors use to reveal their basic financial information.  Disclosure of debtors’ financial condition is an essential condition of relief under the United States Bankruptcy Code.  The bankruptcy schedules, along with the statement of financial affairs are designed to elicit almost every detail of debtors’ financial condition. From a modest consumer debtor in a case under chapter 7 of the Bankruptcy Code with a few thousand dollars in debt to an extraordinarily sophisticated financial services company with liabilities in excess of one billion dollars, all debtors must submit complete and accurate bankruptcy schedules.

“Both business and consumer debtors must submit complete and accurate bankruptcy schedules.”

The following is a concise and plain description of those bankruptcy schedules as they apply to individual debtors in consumer bankruptcy cases.  On December 1, 2015, a new set of forms became effective to all newly filed bankruptcy cases.  Those forms arose from the Judicial Conference Forms Modernization Project.  The new forms track the same information as their predecessors but the design is retouched.  Additionally, the new forms exist in separate sets, applicable to individual debtors and non-individual debtors (think corporations, partnerships and other business organizations).  This review will focus on the new bankruptcy forms schedules A/B, C, D, E, F, H, I and J, as applicable to individual bankruptcy debtors.

Bankruptcy Schedule A/B – Property

Bankruptcy schedule A/B seeks information relevant to a debtor’s interest in property.  Previously, schedule A pertained only to a debtor’s interests in real estate and schedule B sought a listing of all other interests in property that a debtor may have.  Schedule A/B merges those two previously distinct schedules into an integrated, itemized list of various sorts of property.  The first category in schedule A/B is real property (in the parlance of part 1 of bankruptcy schedule A/B, “Each Residence, Building, Land, or Other Real Estate”).  Next, a debtor lists vehicles, followed by personal and household items.  Within those two asset classes, there are further subitems (e.g., electronics, collectables and jewelry).  Next on schedule A/B, a debtor must list all financial assets and business related property.  If a debtor owns farm or commercial fishing-related property, that property must also be detailed on this bankruptcy schedule.  Responses to the specific inquiries on schedule A/B will generally reveal all of a debtor’s property but the final category does not leave the matter to chance and requires a debtor to describe all property not disclosed in response to the prior questions.

Bankruptcy Schedule C – Bankruptcy Exemptions

Bankruptcy schedule C requires that a debtor list all of the property claimed as exempt and therefore unavailable to pay the claims of creditors.  Because Congress left it up to the legislature of the individual states to determine the property that debtors in bankruptcy cases could exempt from creditors, exemption law may vary from state to state.  In many states, a debtor may rely only upon the exemptions available under state law.  In other jurisdictions, a debtor in a bankruptcy case may only apply the “federal” exemptions set out in section 522(d) of the Bankruptcy Code.  The Commonwealth of Pennsylvania permits a debtor to elect the federal exemption scheme or Pennsylvania exemption law.

Depending on the circumstances of any particular case, the decision whether to use the federal or state exemptions may have very serious consequences and may impact a debtor’s right to keep certain assets.  After the selection of the appropriate exemption menu, careful application of each exemption is also very critical.  Misapplication of exemptions to assets could result in a debtor being required to turn over property to a chapter 7 trustee to be liquidated for the benefit of the debtor’s unsecured creditors.  In a chapter 13 case, the same mistake could mean that a debtor would be forced to pay a considerably higher amount of money each month.  When it comes to selection and application of bankruptcy exemptions on schedule C, a highly experienced bankruptcy lawyer will help ensure that a debtor maximizes the value of exemption rights in a bankruptcy case.

Bankruptcy Schedule D – Secured Claims

In schedule D, a debtor is called upon to list all secured creditors.  A secured creditor is one that has recourse to a debtor’s property to protect its right to receive payments.  The two most common kinds of secured creditors for most consumers are mortgagees and vehicle lenders.  However, certain tax claims including real estate taxes may also be secured obligations.  Additionally, a creditor with a judgment against a debtor may also hold a secured claim.  That is so because a judgment acts as an automatic lien on all real property that the judgment debtor owns in the property in which the judgment is entered.  A judgment may also form a lien on other property of the debtor if the judgment creditor has taken the necessary steps to perfect its lien before the filing of the bankruptcy case.

“Ignored secured claims can prevent a debtor from getting a meaningful fresh start even if that debtor receives a discharge.”

 Ignored secured claims can prevent a debtor from getting a meaningful fresh start even if that debtor receives a discharge.  Absent a debtor taking some affirmative measure to avoid or limit a secured claim, a lien will generally survive a bankruptcy case even if a debtor otherwise does everything right and receives a bankruptcy discharge.  As with bankruptcy exemption and selection application, an effective bankruptcy lawyer may prove to be critically important to a debtor developing a strategy for the treatment of secured claims.

Bankruptcy Schedule E/F – Unsecured Claims

The new schedule E/F merges the priority claims together with other general unsecured claims against a debtor.  The Bankruptcy Code gives priority to certain types unsecured claims.  Each priority claim is listed in order such that first priority claims must be paid in full before any second priority claim may be paid.  The priority scheme is designed to provide protection to certain kinds of creditors.  Thus, domestic support obligations, wage claims and certain kinds of taxes are designed priority claims and must be identified that way.  Although the new schedule collapses priority and general unsecured claims onto a single bankruptcy schedule, schedule E/F still requires debtors to list priority claims in a separate section on the schedule and to identify the nature of the claim.  Your Pittsburgh bankruptcy lawyer will help you correctly identify and classify priority claims.

Bankruptcy Schedule G – Executory Contracts and Unexpired Leases

Debtors must also list all “executory” contracts and unexpired leases.  Prior to a bankruptcy case, many people ask:  what is an executory contract?  An executory contract is one that has neither terminated nor expired and upon which substantial performance remains due from both parties.  Just like an unexpired lease, an executory contract is a living, binding legal agreement.  Debtors often face difficult decisions about whether to assume or reject an executory contract or unexpired lease.  A clear explanation of the impact of rejection or assumption from a bankruptcy lawyer can make that difficult decision making process far easier.

Bankruptcy Schedule H – Codebtors

As the instructions on bankruptcy schedule H explain “[c]odebtors are people or entities who are also liable for any debts you may have.”  It is important to list all codebtors with names and addresses and identify the debt upon which each codebtor shares liability.  In many cases, the discharge of indebtedness of a debtor in a bankruptcy case may impact a codebtor’s financial life.  It is important to discuss joint liability during a candid conference with a bankruptcy attorney.

Bankruptcy Schedule I – Income

Bankruptcy Schedules Crunching NumbersDebtors must disclose their income from all sources.  Income information is important and, as entered in the means test, may impact a persons qualification for relief under chapter 7.  A debtor must have a regular source of income in order to qualify as a debtor for a case under chapter 13.  Schedule I is detailed and seeks information about income from all sources and requires information about deductions from payroll.  Additionally, if a debtor has a non-filing spouse, that income must be disclosed too unless they are separated and living apart.  Your bankruptcy lawyer can help you to address the implied problem of having someone else’s income imputed to you (even if it is your spouse).

Bankruptcy Schedule J – Expenses

Bankruptcy Schedule J enumerates almost every typical consumer expense and debtors must honestly report their regular monthly expenses.  Calculation of monthly expenses is an important exercise for the debtor and provides critical information to all parties in interest in the case.  Very often the “monthly net income” calculation reached by subtracting expenses from income gives debtors a sense of how their cash flows on a monthly basis.  Schedule J can also help debtors in chapter 13 cases determine whether they can present a chapter 13 plan that they can pay and is therefore, feasible.

It is important to note that bankruptcy schedules I and J seek the sort of information as does the means test.  However, because the income on the means test is a backward-looking analysis of the six-month period preceding the filing of the bankruptcy case, the income information may diverge from that stated in bankruptcy schedule I.  Similarly, the allowable expenses on the means test of primarily grounded in standard expenses having nothing to do with the actual expenses relevant to the debtor.  Discuss these important distinctions with your bankruptcy lawyers.

Pittsburgh Bankruptcy Lawyers and Important Discussions about Bankruptcy Schedules

Disclosure is of income, expenses, assets and liabilities are a cornerstone of every bankruptcy case.  The bankruptcy schedules are designed to facilitate that disclosure.  Complete and accurate responses to all of the questions in the schedules is vital to the bankruptcy process.  Before you file your bankruptcy case, carefully read and understand the information contained in those schedules.  Candid disclosure is an important step in a bankruptcy process which allows honest but unfortunate debtors some relief from their debts with a fresh start.

 

Taking the Mystery and Mean Away From the Bankruptcy Means Test

Means Test and Chapter 7 Bankruptcy

It Has Never Been Easier to Determine Whether You Qualify for Relief Under Chapter 7 of the United States Bankruptcy Code in Pittsburgh.

Means TestIn 2005, Congress put in place very substantial changes to the United States Bankruptcy Code through an amendment known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).  The BAPCPA amendments set new requirements for eligibility to be a debtor under chapter 7 of the Bankruptcy Code and to receive a discharge under chapter 7.  Importantly, debtors must now undergo a means test if their income exceeds the then-applicable median income for consumers of debtors’ household size in the state in which they reside.

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Eligibility for Chapter 7 Bankruptcy – Median Income Analysis

Debtors whose income does not exceed the relevant median income need not undergo further means testing.  Median incomes information is calculated and published by the United States Census Bureau and median income data is adjusted periodically.  The Office of the United States Trustee publishes median income information on its website.  As of the date of this entry, the median income applicable to debtors in the Commonwealth of Pennsylvania with a household size of one is $50,501.  A household of two in Pennsylvania can earn up to $60,508 without further means test analysis.  A three-person family in Pennsylvania has a median income of $74,083.  With four people the Pennsylvania median income is $89,690 and increases by $8,400 for each additional member of the household.
Median Household Income in the United States: 2015

[Source: U.S. Census Bureau]

The Bankruptcy Means Test Exception Applicable to People with Primarily Business Debts

Individuals whose debts are primarily business debts are excused from the means testing analysis.  The means test analysis under section 707(b) of the Bankruptcy Code applies to individual debtors whose debts are primarily consumer debts.  A Pittsburgh bankruptcy lawyer will be able to help you make the determination of whether your debts are primarily consumer debts or whether you may be exempt from further means testing because of the primary nature of your indebtedness.

The Chapter 7 Means Test and the Presumption of Abuse

The chapter 7 bankruptcy means test is codified in section 707 of the Bankruptcy Code and individual chapter 7 bankruptcy debtors in Pittsburgh and throughout the United States must submit an Official Form 122A-1, Chapter 7 Statement of Your Current Monthly Income.  Debtors must disclose information relevant to their income and household size to determine whether they need to complete the means test.  The means test itself is incorporated into Official Form 122A-2, Chapter 7 Means Test Calculation.  Debtors must draw income data for the means test from the income during the six-month period preceding the filing of their bankruptcy cases.  The Bankruptcy Code permits debtors to subtract from their household any portion of the income of a non-filing spouse that is not dedicated to the payment of household expenses or expenses of debtors’ dependents.  The means test also provides that certain expenses be deducted from a debtor’s adjusted current monthly income to determine monthly disposable income.  That monthly disposable income is then multiplied by 60 to determine a debtor’s five-year disposable income.  If a debtor’s disposable income over five years is less than a certain threshold value (currently $7,700), then the presumption of abuse does not arise.  If the five-year income exceeds the threshold value and a cap value (currently $12,850), then the presumption of abuse arises but the debtor may still elect to complete a statement of special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative.  A showing of special circumstances may justify continued eligibility for relief under chapter 7.  If a debtor’s five-year disposable income is between the threshold and cap values, the presumption of abuse will not arise unless the five-year disposable income is at least 25% of the debtor’s total nonpriority unsecured debt.

Close Call on the Means Test?  Discuss it with a Pittsburgh Bankruptcy Lawyer!

The increase in the administrative cost and duration of a chapter 13 bankruptcy case from a chapter 7 bankruptcy case is considerable.  In many cases a chapter 13 bankruptcy may be warranted but for other individuals a fresh start under chapter 7 of the Bankruptcy Code will offer the optimal path away from financial distress.  A free consultation with a Pittsburgh bankruptcy attorney could help you understand all of your bankruptcy nonbankruptcy options before making any decision.

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Bankruptcy in Pittsburgh – I Want to Keep My Car!

File Bankruptcy and Keep the Car

bankruptcy keep my carCan I File Bankruptcy and Still Keep My Car – Talk to a Pittsburgh Bankruptcy Lawyer Now!

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If you’re considering filing a voluntary bankruptcy case under chapter 7 of the Bankruptcy Code or entering into a repayment plan under chapter 13, you may be interested to know how a bankruptcy case might affect your vehicle loan.  Most workers need their vehicles just to bring themselves to work and back.  In most Pittsburgh bankruptcy cases, people can file bankruptcy and keep their cars.  Generally, as long as one continues to pay on his or her vehicle, she may retain it.

Chapter 13 Bankruptcy.  If you’re behind on your car payment, you may wish to use chapter 13 to retain that vehicle.  Under chapter 13, debtors may pay into a plan over a period of three to five years and, during that time, they may cure and reinstate certain loan balances.  In most cases, even when a debtor is substantially behind on a vehicle payment, chapter 13 may still offer a pathway to keep that car.

Chapter 7 Bankruptcy.  Often debtors are not in a position to repay creditors but still want to keep their automobiles.  In those cases, they may usually retain them as long as they keep current on their vehicle payments.   Particularly in this context, its very important to know whether creditors are secured or unsecured and whether they may have priority claim status.  In order to ensure that you are able to retain your interest in your vehicle, contact Robleto Law today.

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We are a debt relief agency.  We help people file for relief under the United States Bankruptcy Code.  (c) 2017 Robleto Law PLLC  |  Pittsburgh Bankruptcy Law Firm

 

Saving Your Home With Chapter 13 Bankruptcy

Chapter 13 bankruptcy puts a stop to foreclosureConsumer Reorganization Through Chapter 13

If you are behind on your mortgage payments, filing a chapter 13 bankruptcy may help you avoid foreclosure.  If you are behind on payments to the point where a foreclosure complaint has already been filed by your lender, filing a bankruptcy case will immediately halt it.  The moment a bankruptcy case is filed, something called the automatic stay is put into effect.  The automatic stay is a powerful provision of the Bankruptcy Code which prevents any creditor or party-in-interest from continuing litigation against you or depriving you of your property.

Chapter 13 bankruptcy also helps you repay your past due mortgage payments.  Often, once you are several months behind on mortgage payments, you lender may refuse to accept any payment less than the total amount of the arrearages plus penalties and interest as payment, and consider the payment of a single mortgage payment a partial payment.  This perpetuates the vicious cycle.  A chapter 13 bankruptcy case allows you to pay off any arrearages over a three or five year time period – making catching up far more manageable.  Often times, chapter 13 bankruptcy is the only practical option for those substantially behind on their mortgage payments.

There are other solutions for debtors with no other problematic and significant debt beyond mortgage arrearages.  Mortgage modification, an arrangement to mitigate the lender’s loss and lower your monthly mortgage payments, can serve as a solution as well.  Modification is a negotiation and loan restructuring process which back loads your mortgage arrearages and sometimes (though not always) lowers your monthly mortgage payment.  This process often extends the term of your loan allowing your even greater advantages than might otherwise be available in a chapter 13 case limited to five years.

If you are behind on your mortgage payments and have mortgage arrearages  in excess of what you can pay back, give us a call for a free consultation to discuss a solution based on your individual goals and problems with debt.

Business Bankruptcy Lawyers Pittsburgh

Pittsburgh Business Bankruptcy Finding the Right Commercial Bankruptcy Law Firm Might Save Your Business

When Your Business is in Jeopardy, You Should Rely Upon the Vast Experience of an Extraordinary Pittsburgh Bankruptcy Law Firm

 

Pittsburgh Business Bankruptcy

Bankruptcy May Protect Your Business

Pittsburgh has a “no quit” approach to the world. Pittsburgh’s resilience is evident from its early days as powerhouse of American industry through its financial self-reinvention as a modern day center of innovation in medicine and technology. Unsurprisingly, our sports teams recognize that a game “ain’t over until it’s over” and the Pittsburgh Steelers, Pittsburgh Pirates and Pittsburgh Penguins are known for their many come from behind victories.  With that in mind, it should come as no surprise bankruptcy is an option of last resort for many Pittsburgh businesses.  Still, a strategic commercial bankruptcy can sometimes result in a stronger, more profitable business enterprise going forward.  A business bankruptcy case does not carry the same stigma as a consumer bankruptcy case.  Sophisticated business people understand that entrepreneurs often undertake considerable risk in their business ventures.  Business risk involves the inherent potential for both profit and for loss.  When the debts of a business become so excessive that they threaten the ability of that business to continue as a going concern, a business bankruptcy case could offer a way back to solvency.

“A strategic commercial bankruptcy can sometimes result in a stronger, more profitable business enterprise going forward.”


First, consider the affect that a bankruptcy case might have on your business in terms of reputation within your industry.  Certain types of businesses suffer from the mere fact of having filed a bankruptcy case.  If you think your customer base would be substantially diminished as a consequence of filing a bankruptcy case, you should weigh that against the benefits you expect from filing a bankruptcy case (a temporary 20% loss of revenue may be tolerable if it eliminates a large chunk of debt).  Second, talk to your bankruptcy attorney about the benefits your company could see as a result of filing a bankruptcy case.  Your bankruptcy attorney should identify issues that are likely to arise in your particular case.  If your business has aggressive creditors, your bankruptcy lawyer should be able to anticipate the strategy those creditors will take in the bankruptcy case.

What Type of Business Bankruptcy Makes Sense for Your Business?

There is more than one type of commercial bankruptcy.  If you expect to continue operating your business after filing your bankruptcy, you will most likely file a Chapter 11 bankruptcy case.  Under Chapter 11 of the United States Bankruptcy Code, you will retain operational control over your business as a “debtor in possession.”  You will be able to conduct the day to day affairs of your business and to make transactions in the ordinary course of that business.  However, if you wish to undertake any transactions outside of the ordinary course of business (things like selling all of the assets of the business), your bankruptcy lawyer will need to seek the approval of the Bankruptcy Court.

Under Chapter 7 of the Bankruptcy Code, you will give up control of your business and turn over all accounts and records to a Chapter 7 Trustee who will liquidate the assets of the business for the benefit of its creditors and distribute proceeds according to the priorities set forth in the Bankruptcy Code.

Business Bankruptcy Exit Strategy

Before you file your business bankruptcy, you should know what your exit strategy will be.  In most successful business bankruptcy cases, the debtor files a plan of reorganization.  In order to become effective, the Bankruptcy Court must confirm the plan of reorganization and the bankruptcy disclosure statement describing it.  A plan may be approved by the creditors or confirmed over the objection of creditors through a process known as “cram down.”  To be confirmed, a plan must meet several tests, including that it must be fair and equitable, be in the best interest of creditors and meet all other requirements of the Bankruptcy Code.

Increase your chances of success by consulting with an experienced business bankruptcy lawyer in Pittsburgh today.

How the Automatic Stay Works in Bankruptcy Case

The United States Bankruptcy Code provides for an automatic stay upon the filing of any bankruptcy petition. 11 U.S.C. § 362. The effect of the automatic stay is both immediate and broad. The stay halts law suits, stops sheriff sales and lien enforcement, attempts to garnish, repossess property or evict. With few exceptions, filing a bankruptcy case will halt any adverse legal action. In fact, section 362(k) of the Bankruptcy Code provides that debtors are entitled to damages for violations of the automatic stay and, when those violations are willful, a court can award punitive damages to the debtor.
In a Chapter 13 Bankruptcy case, a debtor might file a bankruptcy petition to prevent a sale and, under the provisions of Chapter 13, propose a plan to repay the mortgage arrears over a period of three to five years. In a Chapter 7 Bankruptcy case, the automatic stay could be used to prevent a judgment from getting entered against the debtor and, thereby avoid the fixing of a judgment lien on that debtor’s real estate. Also important to most debtors, the automatic stay prevents creditors from attempting to collect debts. This means that the harassing telephone calls from creditors and collection agencies will end.
From a logical perspective, the automatic stay must have broad application and be strictly enforced–otherwise the fresh start provided by a bankruptcy case would not exist, creditors would simply continue to attempt to collect upon their debts. The automatic stay provides debtors with breathing room.
How long does the automatic stay last? It ends when the debtor receives a discharge and the case closes but it can end sooner. A creditor can petition the bankruptcy court for relief from stay under section 362(d) of the Bankruptcy Code. Typically, an unpaid first mortgage creditor that will not be paid through a Chapter 13 plan will seek relief from stay to foreclose upon the debtor’s interest in the property subject to the mortgage. If a creditor is granted relief from stay, the stay is modified to the extent permitted by the Order of the Bankruptcy Court to allow that only that creditor to pursue its claims.
The automatic stay is one of the most important tools in the bankruptcy toolbox. To find out whether the automatic stay can help you protect your assets and interests in property, you should contact a Pittsburgh Bankruptcy Attorney for a free initial consultation.
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Bankruptcy Exemptions and “The Price is Right”

Bankruptcy exemptions are a privilege belonging to individual debtors in bankruptcy cases. An exemption permits a debtor to shield property that a trustee might otherwise take to pay creditors. Most, but not all exemptions are subject to dollar limits (e.g., a debtor may exempt $3,450 in one motor vehicle, 11 U.S.C. § 522(d)(2)). Under the Federal exemption scheme, a debtor also has a “wildcard exemption” of $1,150, that can be amplified by the unused portion of the debtor’s homestead exemption up to $10,825. The wildcard exemption can be applied to protect any interest of a debtor in property.

Often, debtors face difficult valuation questions for certain assets. What is the value of a one-third interest in a nascent business? How much is a gas lease worth when the lessee has not begun production and the debtor does not know when she will receive royalties or how much those royalties will be?

In 2010, the United States Supreme Court decided that a debtor’s exemption is limited to the dollar amount scheduled (even when the scheduled value and the value of the exemption are equal). Schwab v. Reilly, 130 S. Ct. 265 (2010). Thus, in the context of a gas lease, if production begins after a case is commenced and the debtor exempted $1.00 of her interest under the lease, she could find the royalties in excess of $1.00 are subject to claims by her creditors or a bankruptcy trustee. The Schwab case involved a debtor that understated the value of an asset but argued that, since the exempted value was equal to the scheduled value, the asset was no longer within the reach of the debtor’s creditors. The Court disagreed and limited the value of the exemption to the amount the debtor actually claimed exempt. The United States Court of Appeals for the Third Circuit recently ruled that Schwab was not limited to cases in which debtors purposefully understated the value of assets in order to protect more property than envisioned by the exemptions scheme. In re Orton, No. 11-4157 (3d Cir. Jul. 20, 2012). Rather, debtors are stuck with the value of their claimed exemptions. Therefore, even when a debtor puts a good faith estimate on the value of the asset and exempts the property up to that value, future appreciation (think of the gas well that starts producing after the debtor claims exemptions) in excess of the claimed exemption inures to the benefit of the debtor’s creditors.

Debtors and their bankruptcy lawyers are now forced to play a game of “The Price is Right” with assets. The Schwab and Orton decisions mean that, more than ever, it is important to develop a well-considered bankruptcy strategy with your bankruptcy lawyer.

Cramdown on Secured Creditors in Chapter 11 Bankruptcy Case

For a bankruptcy court to confirm a chapter 11 plan, generally a debtor’s creditors must either be unharmed by that plan or have accepted it. 11 U.S.C. § 1129(a)(8). Under certain conditions, a debtor may cramdown or, have a plan confirmed over the objection of impaired creditors. 11 U.S.C. § 1129(b). Recently, the Supreme Court examined the conditions under which a debtor can sell property that secures a debt to creditor over the objection of that creditor. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct. 2065 (May 29, 2012).
In the RadLAX case, the debtor proposed to sell its property over the objection of its secured lender, without permitting that lender the right to credit-bid, or bid using its secured claim as credit instead of new money. The secured creditor argued that 11 U.S.C. § 1129(b)(2)(A)(ii) provided it with a right to credit bid at the sale of its collateral. The debtor relied upon 11 U.S.C. § 1129(b)(2)(A)(iii), claiming that the sale gave the secured creditor the “indubitable equivalent” of its claim.
The RadLAX court reasoned section 1129(b)(2)(A) provided three paths to confirm a plan over the objection of a secured party. First, the plan could provide that the secured party retain its lien and accept deferred payments. Second, the plan could provide for the sale of the collateral securing the debtor’s obligation to the secured creditor (allowing the secured party to credit-bid) and, third, it could provide the secured party the “indubitable equivalent” of its claim. Since the second cramdown method applied specifically to sales of collateral and the third related, more broadly, to “the realization of such holders of the indubitable equivalent of [their] claims,” the more specific provision had to be given effect of the general one. RadLAX Gateway Hotel LLC at 2071-72. Thus, Supreme Court affirmed the opinion of the Court of Appeals, rejecting the debtor’s proposed sale.

Pittsburgh Bankruptcy Attorney

Pittsburgh bankruptcy attorneys can help you through some very difficult situations. Bankruptcy Attorneys in Pittsburgh know that, like the rest of the nation, Pennsylvania residents have seen their unemployment rates rise over the past few years.  The loss of income from losing a job can make it impossible to pay credit card debt.  Worse, unemployment can result in falling behind on your mortgage payments and home foreclosure.  For tough situations, you need a tough bankruptcy lawyer.

Free ConsultationIf you are working and want to stay in your home, a Pittsburgh bankruptcy lawyer may be able to keep you in your house by forcing your mortgage lender to accept payments over a period of 36 to 60 months.  If you owe tens or hundreds of thousands in credit card, medical or business debt, a pittsburgh bankruptcy attorney could help you discharge some or all of that debt with little or no payment.  Unlike debt consolidation and negotiation companies, a good bankruptcy lawyer does not merely take money from you and permit creditors to file judgments against you, leaving you defenselessly hoping to settle at some uncertain point in the future.  The best bankruptcy lawyers will tell you the effect of your filing a bankruptcy case before you ever sign a voluntary petition.

To make your decision, call today for a free consultation with a Pittsburgh Bankruptcy Attorney.

What is a Bankruptcy Exemption?

Bankruptcy exemptions are critical to individual bankruptcy filers.  Exemptions give debtors in bankruptcy cases the ability to shield certain of their assets from the reach of their creditors.  A fresh start would not be very meaningful if it meant that you had to turn over every stitch on your back and every cent you have.  The United States Bankruptcy Code permits states to provide their own set of exemptions to debtors or to allow debtors to use the exemptions contained in section 522(d) of the Bankruptcy Code.  Some states, including the Commonwealth of Pennsylvania, allow debtors to select between the federal exemption scheme and the exemptions provided under state law.  The Pennsylvania exemptions are scattered through numerous statutes and still others are “common law exemptions,” contained within the written opinions of state courts of law.  Debtors should consult with a bankruptcy lawyer to determine which set of exemptions would protect more assets.

Generally speaking, the federal exemptions permit a debtor to exempt $21,625 in property that the debtor or a dependent of the debtor uses as a residence.  If debtors are married, filing a joint bankruptcy and own their home together, they can protect even more equity by applying both exemptions to their property.  In the case of a married couple where only one spouse has significant debt but both spouses own the home, it may make sense to apply the Pennsylvania exemptions.  In Pennsylvania, married couples who own a home usually hold it as “tenants by the entireties.”  The couple’s interest in property is not divisible and, therefore, creditors of only one spouse cannot resort to that property for payment.

Under the federal exemptions, debtors may exempt $3,450 of their interest in a vehicle.  In a simple example, if you own a vehicle that is worth $10,000 but, upon which you still owe $8,000, you may exempt your $2,000 interest in the vehicle in a bankruptcy case and continue paying on the $8,000 loan to keep the vehicle.  The federal exemptions also permit a debtor to exempt $1,450 of jewelry, $11,525 in household goods, furnishings, wearing apparel, appliances, books, animals, crops or musical instruments, $2,175 in “tools of the trade” of a debtor and most life insurance and retirement assets.  Additionally, the federal exemptions allow for  a “wild card” exemption of $1,150 in any property, which is increased up to $10,825 by any unused homestead exemption.  Thus, if a debtor does not need to exempt equity in a home, that debtor has more flexibility to exempt other property through the use of the wild card exemption.

Knowing how your exemptions work is a prerequisite to getting a meaningful fresh start in a bankruptcy case.  If you have questions about bankruptcy exemptions, you should consult with a bankruptcy attorney for a free consultation.  To find out how, call (412) 925-8194 now.