In a case that the US Trustee's office alleged expenses were overstated on schedule J, and that schedule I should have included a draw from his business for cancer treatment as a special circumstance rather than including in monthly income, the court sided with the Debtor in denying the motion to dismiss under 11 U.S.C. §707(b)(1) and (b)(3).  In re Miller, 2022 Bankr. LEXIS 1382, Case No. 3:21-bk-02093-BAJ (Bankr. M.D. Fl., 13 May 2022).  J. Burgess.    The debtor is the owner of two businesses, one of which owned a commercial property in Nebraska which was foreclosed on, resulting in a deficiency judgment of $128,903 against both the debtor and that company.  Debtor's ongoing income is primarily from the other business (GMI) in the form of draws and payroll.  Debtor scheduled $232,124 in unsecured debt including $75,000 in non-dischargeable student loan debt.    Debtor scheduled $9,014.50 monthly income and $9,000.98 in monthly expenses on schedules I & J.  The trustee disputed these figures, asserting $9,698.13 income and $8,086.56 in expenses, thereby asserting $1,611.57 in net monthly income.   The $638.63 income discrepancy is based on a draw debtor took out to pay for cancer treatments.  The court noted that the monthly draws from GMI were funded from an EIDL loan which GMI will have to repay.   The expenses showed a $915 discrepancy, primarily based on an anticipated $500/month car payment and $200/mo for car insurance.  While debtor intends to surrender his current vehicle, he will still require a stable vehicle for work which includes out of state travel, and his spouse requires a separate vehicle for care of their adult disabled son.   The trustee also objected to a $50 increase in the transportation expenses since filing asserting it is not supported, as well as a $125/mo expense for palm tree trimming, which trimming is required by the homeowners association.  The conditions set in the code for dismissal of chapter 7 include §707(b)(1) for debtors whose debts are primarily consumer debts if granting of relief would be an abuse of the provisions of chapter 7; and §707(b)(3) requiring an determination whether the totality of the circumstances of the debtor's financial condition demonstrates abuse. The trustee bears the burden of proof to show such abuse where the presumption under §707(b)(2) does not arise.1   While a debtor's ability to pay is a primary factor in the analysis, it is not conclusive.2  Rather, other circumstances must be considered along with the ability to pay.  These circumstances include 1) whether unforeseen or catastrophic events such as sudden illness, disability, or unemployment propelled the debtor into bankruptcy; 2) whether the debtor's standard of living has substantially improved as a result of the bankruptcy filing; 3) the debtor's age, health, dependents, and other family responsibilities, 4) the debtor's eligibility for chapter 13 relief and whether creditors would receive a meaningful distribution in chapter 13, 5) the age of the debts for which discharge is sought, and the period of time over which they were incurred; 6) whether the debtor incurred cash advances and made consumer purchases far in excess of the ability to repay; 7) whether the debtor made any payments toward the debts or attempted to negotiate with creditors; and 8) the accuracy of the debtor's schedules and statement of current income and expenses.3  As to the ability to pay, the court agreed that the draw to pay for cancer treatments was properly categorized as a special circumstance, again noting the requirement that the debtor's company, GMI, is obligated to repay the loan that funded the draws.  As to the expenses, the court rejected the trustee's argument that car expenses should be excluded due to the planned surrender of the vehicle, agreeing with the debtor that he will need a vehicle for work as well as a separate vehicle for his spouse to care for the disabled son, and found that the estimated car expenses in the budget were reasonable.  The expense for palm tree trimming was also found to be reasonable given that it is a requirement of the homeowners association, and that the debtor had attempted to mitigate the cost.  The court also found that the $50/month increased transportation expense was allowed based on the well documented news of increased cost of gasoline and groceries.  Thus the court agreed with the debtor's computation of income and expenses rather than the trustees.  The court also found that the totality of circumstances test would have favored the debtor.  The instigating factor in filing was a deficiency judgment from a foreclosure.  There is no evidence of an improvement is debtor's standard of living given the surrender of a truck and motorcycle.  The debtor's health is an ongoing concern due to a diagnosis nd treatment of skin cancer post-petition.  While he testified that he is currently cancer-free he indicated he is not out of the woods, and is still being closely followed by his physician.  Debtor also is responsible for supporting his adult disabled son.  Finally, the court found there would not be a meaningful distribution to unsecured creditors in chapter 13 given the size of the unsecured creditor pool.1 In re Norwood-Hill, 403 B.R. 905, 912 (Bankr. M.D. Fla. 2009); In re Walker, 383 B.R. 830, 836 (Bankr. N.D. Ga. 2008).↩2 In re Hernandez, No. 3:21-bk-624-JAF, 2022 Bankr. LEXIS 98, 2022 WL 150846 at *3 (Bankr. M.D. Fla. Jan 14, 2022).; In re Degross, 272 B.R. 309, 313 (Bankr. M.D. Fla. 2001). ↩3 In re Norwood-Hill, 403 B.R. at 912.↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, Fl 33609-1703813 870-3100https://hillsboroughbankruptcy.com  

Bankruptcy and Depression: No, I’m Not a Doctor This post is about bankruptcy and depression. No, I’m not a doctor. (Actually my law school degree says I’m a JD– a juris doctor). But I see depressed people a lot. And because I see it a lot, I’ve read up on it. The VA says that […] The post Bankruptcy and Depression by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

Looking forward to participating in this panel discussion webinar.  Hope to “see” you there! Everything You Wanted to Know About Arbitration (But Were Afraid To Ask): Filing for Arbitration and Preliminary Conferences ABA Litigation Section Solo & Small Firm Committee Commercial & Business Litigation and Young Advocates Committee Wednesday, June 15, 2022 9:00-10:00 AM PT | 10:00-11:00 AM MT | 11:00 AM-12:00 PM CT | 12:00-1:00 PM ET Program Description: The first of a 4-part series covering all aspects of arbitrations, including filing for arbitration and preliminary conferences. This panel discussion will focus on filing your first arbitration claim, initiating the claim, forms to be used, drafting demand/claim, rules to be used (if not addressed in arb clause), a review of a preliminary conference/scheduling sample Order and an in-depth discussion of what to know for the preliminary hearing. Panelists: Aric J. Garza, Aric J. Garza Law PLLC (Program Coordinator) Sylvia Mayer, S. Mayer Law PLLC Mike Steger, Law Offices of Michael D. Steger, PC (Moderator) https://form.jotform.com/221214393165147   The post Everything You Wanted to Know About Arbitration (But Were Afraid To Ask): Filing for Arbitration and Preliminary Conferences appeared first on Sylvia Mayer Law.

Sylvia Mayer of https://smayerlaw.com/ joins Mac Pierre-Louis and Natalia Olowska-Czajka of https://olowskapierre.com/ to look into the crystal ball and predict the direction of bankruptcy mediation in 2022. Mediation is used in bankruptcy cases in a variety of contexts, including disputed claims, challenges to discharge, avoidance actions, cash collateral and DIP financing, plan terms, contract disputes, fiduciary duty challenges, and more. Bankruptcy cases fall into two broad categories: consumer (primarily chapters 7 and 13 bankruptcy cases) or commercial (primarily chapters 7 and 11 cases).  In this video, Sylvia explores the factors that may contribute to the increase or decrease in consumer and commercial bankruptcy filings such as rising interest rates, supply chain challenges, increase in medical debt, access to credit markets, and pace of foreclosures. Some relevant statistics to consider include: 12,461 Chapter 7 bankruptcies were filed in Texas in 2021 compared to 15,474 in 2020 and 17,387 in 2019. 828 Chapter 11 bankruptcies were filed in Texas in 2021 compared to 1,841 in 2020 and 773 in 2019. 1 in 10 Americans owe medical debt Nearly 40% of small businesses in the U.S. intend to raise prices by 10% or more in 2022. 65% of loan professionals believe that bankruptcy filings will increase in 2022 In 2021, only 8 public companies with more than $300 million in assets filed for bankruptcy.  The last year with so few filings was 1987. Three jurisdictions handled 2/3 of the large chapter 11 cases filed in 2021 – Delaware (24), Southern District of New York (12), and Southern District of Texas (17). Keep in mind that “predictions” is another word for speculation.  No one knows what the future holds and these predictions should not be relied upon as statements of fact. #bankruptcy #mediation #bankruptcymediation #consumermediation #chapter11mediation The post Crystal Ball: Predictions about Bankruptcy Mediations appeared first on Sylvia Mayer Law.

Dr. Seuss’ “One Fish, Two Fish, Red Fish, Blue Fish” offers a classic example of missed opportunities.  Let me draw you a picture. Visualize this:  Two Dr. Seuss characters are standing back-to-back in a room.  One is named Joe.  We do not know the other’s name.  Each is holding a phone receiver up to their ear.  The two receivers are connected by a cord, but a mouse has cut the cord. Here’s the dialog: First character says:  “Hello!  Hello!  Are you there?  Hello!  I called you up to say hello.  I said hello.  Can you hear me, Joe?” Joe responds:  “Oh no.  I can not hear your call.  I can not hear your call at all.  This is not good and I know why.  A mouse as cut the wire.  Good-by!” There are so many missed opportunities here that play out in everyday life, including: They are in a room together, but unable to look at or talk to one another. While they could technically hear each other, a third party – the mouse – interferes with their connection. They each get frustrated that the other is not listening to them, so they terminate the conversation. How does this play out in mediation and conflict resolution?  I will share a stark example. I mediated a complex multiparty dispute in which one party had the data that the other parties needed in order to negotiate a settlement.  Before I was involved, the party with the data (Party A) created electronic data rooms for each of the other parties (Party B, Party C, Party D).  Party B and Party C accessed the data room, but Party D never did.  Party D instead complained that they had not been given access to the data room.  Party D was so insistent that they had not been given access to the data room that they took Party A to court – more than once – asking the court to order Party A to grant access. By the time the parties came to mediation, everyone was frustrated, there was a huge trust deficit, and a lot of animosity.  Party D continued to insist that they were unable to engage in settlement talks without access to the data.  Party A continued to insist that they had – multiple times – given Party D access to the data. So, what did I do to bridge this divide?  I asked that the people with technical knowledge from Party A and Party D sit in a room together, with me, and show me the data room for Party D.  Guess what we discovered?  Due a typographical error on the backend, Party A had been populating one data room for Party D, but the code that Party D was given to access the data room took them to an empty room. A classic missed opportunity.  In this case, due to simple human error.  An error we discovered when we sat in a room together, sharing information, and eliminating the middle man so that we could hear (or in this case, see) what was really going on. Once Party D had access to the data, we were able to move forward on the path to conflict resolution. So how do you avoid missed opportunities?  Stop, look, and listen. Author’s Note: As a mediator, I am a “forever student” always seeking new ways to help people find a path to resolution in mediation.  As a parent, I have spent a gajillion hours reading books to my children.  Oftentimes, these books teach me new ways to approach conflict resolution.  In this case, Dr. Seuss’ “One Fish, Two Fish, Red Fish, Blue Fish” inspired this post. Can You Hear Me - Missed Opportunities in Mediation The post Mediator Insights: Can You Hear Me? Missed Opportunities in Mediation and Conflict Resolution appeared first on Sylvia Mayer Law.

Social Security Disability Insurance (SSDI) is a payroll-tax-funded insurance program managed by the Social Security Administration (SSA).  The program serves to support people who are disabled and have a qualifying work history, either through their employment or a family member.  SSDI provides monthly benefits to people who are unable to maintain steady employment.  There are […] The post How Much Money Can Your Spouse Make if You Are Receiving SSDI in Pennsylvania? appeared first on .

An oft-touted truism about both negotiation and mediation is that trust is critical to reaching an agreement.  But is it? Parties typically come to mediation or engage in negotiation with a trust deficit.  Perhaps parties feel wronged, betrayed, or angry.  Perhaps there is no prior history between the parties, or they have a particularly challenging history.  Notwithstanding this trust deficit, reaching an agreement remains possible. Parties often select a mediator based on recommendations, counsel’s experience with the mediator, or available data (i.e., subject matter expertise, neutral experience, or stated philosophies).  But even if counsel knows the mediator, the actual parties do not.  Notwithstanding this lack of pre-existing trust in the mediator, settlement remains possible. So, is trust critical to reaching a negotiated or mediated agreement?  To explore the answer to this question, read the attached article, which is reprinted from the Spring 2022 Newsletter of the Bankruptcy Law Section of the State Bar of Texas. SBOT Bankruptcy Newsletter - Trust in Negotiation and Mediation - Final https://texasbar.informz.net/texasbar/data/images/Sections/2021-2022/Bankruptcy/Spring%202022%20NL/Mayer.pdf The post Is Trust a Necessity in Bankruptcy Negotiation and Mediation? appeared first on Sylvia Mayer Law.

 SubChapter V, the new small business chapter 11 bankruptcy is approximately 2 years old. Congress’s goal was to create a less costly form of  reorganization for small businesses.  For many small businesses, Chapter 11 filings were too expensive. SubChapter V combines elements of chapters 13 (which is only for individuals) and 11.We wrote about SubChapter V on our blog at https://shenwick.blogspot.com/search?q=subchapter+vA recent article at Bloomberg titled “Analysis: Four Statistical Snapshots of Subchapter V’s 1st Year can be found at  https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-four-statistical-snapshots-of-subchapter-vs-1st-yearThe Bloomberg article states that since the first case was filed in the Middle District of Tennessee on Feb. 19, 2020, a total of 1,643 bankruptcies were filed pursuant to Subchapter V. The Middle District of Florida had the most Subchapter V cases filed during its first year with more than 140 cases.  Florida, California, and Texas rounded out the top five.According to the article, approximately 50 Subchapter V cases were filed in the SDNY and 50 in the EDNY.A recent article at JD Supra titled Subchapter V Changed The Chapter 11 Bankruptcy Landscape – How Should A Creditor Protect Itself? Which can be found at https://www.jdsupra.com/legalnews/subchapter-v-changed-the-chapter-11-1845098/  details how creditors can protect themselves if they are involved in a Subchapter V case.At Shenwick & Associates, we filed one Subchapter V case and then quickly moved to convert that case to chapter 7 due to, in our opinion, a difficult to deal with and inexperienced Subchapter V Trustee. Unfortunately SubChapter V requires that a Subchapter V Trustee be retained in the proceeding and the Debtor has no control over who that trustee will be.Subchapter V remains a work in progress and only time will tell if this new version of chapter 11 will be successful!Attorneys, accountants or debtors who have questions about Subchapter v or small business reorganizations should contact Jim Shenwick, Esq 212 541 6224   jshenwick@gmail.com

 Why there’s a unified movement to cancel student loans but not credit card debt or mortgages? Very interesting article discussing this topic at CNBC at https://www.cnbc.com/2022/05/10/why-theres-a-push-to-forgive-student-loans-but-not-other-debt.htmlJim Shenwick, Esq. 212-541-6224 jshenwick@gmail.com

I’ve been having nightmares about the 9th’s Circuit’s decision in Siegel for 20 years. Broad strokes, Siegel (143 F.3d 525 (9th Cir. 1998) holds that a filed claim in a no asset bankruptcy case to which no one objects is entitled to preclusive effect in subsequent litigation by reason of Bankruptcy Code §502. In Siegel, […] The post Siegel, Claim Preclusion & Me appeared first on Bankruptcy Mastery.