Category Archives: means test

Satan’s Credit Cards

This article in CNNMoney identifies 9 credit cards industry experts told CNNMoney were among the worst in America for nose-bleed interest rates and ridiculous fees. Here’s the list:

  1. Applied Bank Unsecured Visa Gold Card
  2. First Premier Bank MasterCard
  3. Baby Phat Prepaid Visa RushCard
  4. Hooters MasterCard
  5. The Shack Credit Card
  6. Shell Select Member Card
  7. Visa Black Card
  8. JCPenney Rewards Credit Card
  9. Household Bank Premium Platinum MasterCard

 

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The Real Reason Chicago Population Went South

 

quoted from RealEstateUS

Foreclosed and Bankruptcy Homes Led to Population Decline in Chicago -> http://goo.gl/epKjA #foreclosure

In re Lisa C. Davis, 08-16025 (ND IL ED)(J. Wedoff)

In re Lisa C. Davis, 08-16025
Issued December 16, 2010
By Judge Eugene Wedoff

 

The Issue: 11 USC 1325(b), introduced by BAPCPA in connection with the notorious hanging paragraph at 1325(a) – states that a plan of reorganization in Chapter 13 must commit all the debtor‘s discretionary income each month or pay creditors in full; or face dismissal. The issue in this case was whether 1325(b) requires the debtor to commit all discretionary income or pay all creditors in full when seeking to modify their confirmed Chapter 13 Plan.

The Upshot: No. 11 USC 1325(b) does not require the debtor’s full commitment of discretionary income or full payment of creditors when a confirmed plan is under consideration. When a debtor sought to modify her plan due to a change in circumstances that would have permitted her to pay less at the outset of the plan and shorten the plan’s commitment period if it had occurred before the initial plan was drawn up, the Court allowed her to use those lower numbers going forward regardless of whether the use of those figures satisfied 1325(b).
Ed. Note: Booyah! Chapter 13 debtors win.

Click here to view and download the Opinion in .pdf format.

Ransom v. FIA Card Services (U.S. S.Ct.)

Ransom v. FIA Card Services, N.A., f/k/a MBNA America Bank, N.A.
Certiorari from the U.S. Court of Appeals for the 9th Cir., Case 09–907
Argued October 4, 2010—Decided January 11, 2011

The Issue: Here the question was whether a Chapter 13 debtor could deduct the allowable auto payment from his monthly budget even though he did not have a car payment (i.e the vehicle was paid for). Put another way, is it fair for all debtors to be entitled to the maximum allowable deduction from their monthly disposable income, or must debtors establish what they actually pay?

The Answer: The Court ruled 8 to 1 (Scalia J. dissenting) that if a debtor makes more than the median income for his State then he must establish that he incurrs the amounts deducted from his monthly living expenses. No more automatic deductions if debtor cannot prove what he pays.

The Gist: To determine “disposable income” BAPCPA gave us the Means Test, which starts with gross monthly income then deducts living expenses – i.e. “amounts reasonably necessary for maintenance or support” of the debtor. In a Chapter 13 case the expenses considered “reasonably necessary” are identified in 11 U.S.C. §1325(b)(2)(A)(i) and include “applicable monthly expense amounts” as specified in National and Local IRS standards. Since BAPCPA was adopted, it has become common practice to include expenses at the maximum allowable level even if the debtor does not have, or pay for, that type of asset. This case appears to say that the party is over for Chapter 13 debtors.

See Also: this post from Chicago Attorney Steve Jacobowski on the Bankruptcy Litigation Blog regarding the Scalia dissent.

 

I knew they Government was up to something …

 

Median Income Figures Eff. Nov. 01

State-by-State Median Income thresholds as of November 1, 2010 can now be found online at the US Trustee site.

Click on the image below to be taken to the underlying chart on the UST’s Website.

 

In re Anderson,10-3828 (J. Squires)

IBLB Exclusive!

Wheaton lawyer David J. Boersma recently took on the great and powerful Glenn Steans, Lisle Chapter 13 Trustee and … won? At least that’s how it looks. I just got off the phone with David and he was characteristically humble. The issue before Judge Squires in the matter of In re Anderson was this: Is social security part of the Debtor’s “income” for purposes of a Chapter 13 Plan? Judge Squires answered “No” in this case. Boo-ya. At the moment I’m still combing through David’s 2 massive briefs. He says he poured over 1,000 pages to win this argument and I believe him. Contact David at attorneyboersma@sbcglobal.net to congratulate him, then jump on Pacer and check out his briefs … so to speak Anyway, congratulations David.