Thursday, December 31, 2009

Means Test Allows Vehicle Expense For Unencumbered Vehicles

Debtors seeking chapter 13 bankruptcy relief must propose and have confirmed a chapter 13 repayment plan. Debtors are subject to a “means test” if their household incomes are above the median income level for their state. Above-median-income debtors must proposed chapter 13 plans that devote all of their “projected disposable income” to the repayment of creditors. Problematically, the term “projected disposable income” is not defined by the US Bankruptcy Code.


In the case of In re Wisham, 416 B.R. 790 (Bankr. M.D.FL 2009), debtors were above-median-income earners who had proposed a repayment plan amount that was less than the amount the trustee believed was mandated by the Bankruptcy Code. Debtors had deducted from their “projected disposable income” calculation an amount debtors believed they were entitled to deduct pursuant to standards promulgated by the IRS for vehicle ownership.

The chapter 13 trustee objected to the plan’s confirmation alleging that the plan failed to provide the appropriate projected disposable income amount. Specifically, the trustee challenged debtors’ ability to take a vehicle ownership expense deduction for a motor vehicle that debtors owned free and clear of any liens. The trustee maintained that the projected disposable income amount provided in the chapter 13 plan should be increased by the amount of the deduction taken by debtors for the vehicle deduction.

The bankruptcy court rejected the trustee’s position and held that debtors could deduct a vehicle ownership expense when calculating the “projected disposable income.” The court allowed debtors to deduct the vehicle expense amount identified in standards promulgated by the Internal Revenue Service even though debtors owned the vehicle outright and had no lease or contract payments thereon.


Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

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For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Tuesday, December 8, 2009

Mortgage Lienstripping via Bankruptcy Returns as Part of Financial Regulatory Bill

The American Bankruptcy Institute is reporting as follows:

"House Judiciary Chairman John Conyers (D-Mich.) has submitted an amendment to the financial overhaul package that would allow a bankruptcy judge to modify the terms of a home mortgage, including reducing the principal, CongressDaily reported today. Fifty-four amendments were filed two hours before deadline submission yesterday, and the House Rules Committee will meet today to consider the parameters for floor debate and again Wednesday before issuing its rule. Debate on the legislation could start as early as Wednesday. Against massive opposition from the banking industry, the House passed similar legislation this year, but the Senate fell 15 votes short to enact cloture."




Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.

Treasury Summons Mortgage Lenders to Meet on Loan Modifications

The American Bankruptcy Institute is reporting as follows:

"The Treasury Department summoned Bank of America Corp., Citigroup Inc. and other mortgage servicers to Washington, D.C., yesterday to accelerate U.S. foreclosure prevention efforts ahead of a year-end deadline for some loan modifications, Bloomberg News reported yesterday. The banks, which also include Wells Fargo & Co., JPMorgan Chase & Co. and Morgan Stanley, face a Dec. 31 deadline to make permanent the trial refinancings and concessions they extended this year to about 375,000 homeowners at risk of default. Banks have blamed the shortcomings on borrowers failing to turn in all their paperwork and confusion about eligibility standards. Banks are rushing to meet a new Treasury deadline, announced Nov. 30, to permanently convert more than half of the 650,994 loans that were in trial modification plans at the end of October into permanent reductions by year’s end. The Obama administration’s $75 billion program to encourage banks to lower monthly mortgage payments and alter loan terms for those in need had permanently modified 1,711 loans through September, according to a congressional oversight panel. Of the 375,000 loans scheduled for conversion to permanent modifications, those that aren’t switched over by Dec. 31 may not be eligible for HAMP again in the future, the Treasury said."

Warmest Regards,

Bob Schaller


Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Click for Bankruptcy Lawyer Job Opportunities.

Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.

I encourage you to SUBSCRIBE to this blog by completing the box to the right of this post so you will automatically receive future blog postings. Next, you can review past and future blogs at any time by clicking the "archive" link in the column to the right of this posting. Plus, you are invited to submit a question by utilizing the "question" box in the column to the right of this posting.


For information about Chapter 7 bankruptcy Click Here

For information about Chapter 13 bankruptcy Click Here

You are invited to contact Attorney Schaller at 630-655-1233 or visit his website at http://www.schallerlawfirm.com/to learn about how the bankruptcy laws can help you.

NOTE: Robert Schaller looks forward to the opportunity to talk with you about your legal issues. But please remember that all information on this blog is for advertising and general informational purposes only. Please read Bob's disclaimer.

I recommend that you review a few other blogs that may be of interest to you. These blogs are identified in the right column and are set forth below: bankruptcy issues blog; bankruptcy and family law issues blog; bankruptcy and employment issues blog; and bankruptcy and student loan issues blog.