LAW OFFICE OF D.L. DRAIN, P.A.

1702 W. Camelback, Suite 264

 Phoenix, AZ 85015

Phone: 602.246.7106

Fax: 602.249.1969

E-mail: DDrain@DianeDrain.com

  
   


   
 

 

BANKRUPTCY ATTORNEY NOTES: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 "BARF"



 

 

The following are far from an exhaustive list of reference materials.  Please use at your own risk.   My thanks to the many folks who have taken their time to contribute sources.  If you have something you would deem relevant to add, please feel free to mail it to DDrain@DianeDrain.com.

CLE Materials and other Resources at the State Bar of Arizona
 contact: Teri Yeates for info - 602-340-7312

◙  National Association of Consumer Bankruptcy Attorneys (NACBA) series: Case Law Update; Chapter 13 – Chapter 7 Debates; Washington Update; Tax Issues Under the New Legislative;Till and Rash: Secured Debts in Chapter 13 (2 cd’s); Fair Credit Reporting and Fair Debt Collection; Redeem, Reaffirm, Surrender or Retain; Means Testing, Credit Counseling, and Credit Education; Ethics; Objections to Claims; NACBA Website and Collaborative Work Environment; Mortgage Servicing Abuses; Bankruptcy: Past, Present, Future…Keep on Fighting
 ◙  CD - Commercial Law League of America - CLLA: Bankruptcy Reform:  Understanding the Radical Bankruptcy Code Changes.
 ◙   Bankruptcy and Taxes Under the Act, Poker at its Best, Tracy Essig - prepared for State Bar of Arizona CLE programs
 ◙   Means Test Calculator, Client Training Videos - teaches procedure, concepts and pitfalls of bankruptcy, by DigiCounsel
 ◙  Unbundling Legal Services - Arizona State Bar Ethics Opinion (05-06).

District of Arizona

◙   Attorney CM/ECF filing Instructions for Changes made by the Bankruptcy Act of 2005 (posted September 28, 2005)
 ◙   General Order (DRAFT) (posted 9/11/05) re: Chapter 13 procedures for cases filed on or after October 17, 2005
 ◙   General Order (DRAFT) (posted 9/11/05) re Section 521

Articles and Other CLE Materials

◙   American College of Bankruptcy - best practices white paper
 ◙  ABI Committee News: Summary of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
 ◙   FAQ's from NACBA Chicago convention, 7/05
 ◙   House Majority Leader, Tom Delay, In Debt to Big Banks and Credit Card Industry "the best law money can buy".  Millions of dollars paid to force bankruptcy changes through Congress.
 ◙   ABLJ BAPCPA articles1.pdf  Courtesy of Judge Case, attached is a list of 19 articles on the new Act from the American Bankruptcy Law Journal.  Instructions for obtaining access to these articles are included in the attachment.
 ◙   Overview of Important Developments and Potential Impact on Corporate Restructuring Under the Bankruptcy Code, Kirland & Ellis, LLP. Powerpoint
 ◙  Understanding the Radical Bankruptcy Code Changes: Business and Consumer Issues, Commercial Law League of America and its Bankruptcy Section, July 5, 2005

The Code and Rules

◙    BAPCPA Bankruptcy Reference Library (post-October 17, 2005 law)
 ◙   A decision from the Bankruptcy Court for the Southern District of Georgia determining that attorneys are NOT "debt relief agencies" under BAPCPA
 ◙   Proposed Amendment to Bankruptcy Rules (uscourt.gov)
 ◙   Davis Polk & Wardwell blacklined version of the Bankruptcy Code - S.256
 ◙   Link to another version of S 256 provided by Bankruptcy Media.com (not redlined)
 ◙  Courtesy of Dianne Kerns.  Black-lined copies of the bankruptcy code and rules can be purchased through the publisher indicated below.  Their version costs $15 - $20 per book, depending on volume.  No sales tax and shipping is 8% of cost.  (FYI: West version retails at $50)  Web: www.legalpub.com  Email: cdahlstrom@legalpub.com

Case Law

◙   Findlaw - case summaries (since September 2000)
 ◙   In re McNabb (D.Az 6/23/05 - J. Haines) re: homestead exemption - AZ is an opt out state, therefore $125,000 cap provided in Section 522(p) does not apply.
 ◙   In re Sosa (WD of Texas 2006) - Dismissal of chapter 13 for Debtors failure to file a Certificate of Credit Counseling.  Judge Frank Monroe really lambastes Congress for its abuse of the consumer; calling some of BAPCAP's provision "inane", "absurd" and incomprehensible to "any rational human being."  This is a "must read".
◙  Rousey v. Jacoway (US Supreme Court 2005) Section 522(d)(10) exempts IRAs from the bankruptcy estate.
 ◙  Central Virginia Community Collect v. Katz (US Supreme Court, 2006) A bankruptcy trustee's proceeding to set aside the debtor's preferential transfer to state agencies is not barred by sovereign immunity.

Links to IRS, Census Bureau and Social Security

◙   IRS National Standards for Allowable Living Expenses (for cases filed after 2/13/06)
 ◙   Local Standards for Allowable Living Expenses for Transportation - West Census Region (Arizona) (for cases filed after 2/13/06)
 ◙   Local Standards for Allowable Living Expenses for Housing and Utilities for Arizona (for cases filed after 2/13/06)
 ◙   Census Bureau Median Family Income by Family Size (for cases filed after 2/13/06)
 ◙   Section 521(e)(2)A): Tax Transcript: use a MFTRA-X form for disclosure to Trustee and creditors.  How to order a MFTRA-X transcript: National Priority Hotline: (866) 860-4259.  Get one for each year(s) client owes.  Must fax Power of Attorney -will continue to get tax info for years after bankruptcy.  Therefore, better to use a Tax Information Authorization: Form 8821, plus cover letter indicating the type of transcript requested, tax year(s) - (note get several years before client thinks they owe), type of tax and client's SSN and address.  Ask them to fax transcripts. 
 ◙  Actual copy of your client's return: mail Form 4506 (PDF), Request for Copy of Tax Return along with a check or money order for $ 39.00 per tax year made payable to the "United States Treasury". Allow 60 calendar days to receive your copies.

Most needs for tax return information can be met with a tax return transcript or a tax account transcript, rather than an actual copy of the return. The tax return transcript shows information from the return as it was originally filed. A tax account transcript shows any later adjustments either the taxpayer or the IRS made after the tax return was filed. Transcripts are provided free of charge. You can obtain a transcript by calling (800)–829–1040 or by completing and mailing Form 4506-T (PDF), Request for Transcript of Tax Return, to the address listed in the instructions to request all types of transcript verification of non-filing, and wage/income information.

Transcripts will be mailed directly to you, and should be received within two weeks after the IRS gets your request. Transcripts can be mailed to a third party if you specify this on Form 4506–T. However, you must sign and date the form giving your consent for the disclosure. Link to IRS web site page on this topic:  http://www.irs.gov/taxtopics/tc156.html
_____________________

OBTAIN TRANSCRIPTS OF RETURN IN 24 HOURS THROUGH PRIVATE SERVICE; $20 PER TRANSCRIPT - Coast-to-Coast Information Services, through its web site FullTaxTranscripts.com, provides transcripts of return which may be used to satisfy the requirement of 11 U.S.C. § 521(e)(2)(B) to provide the trustee with a copy of the debtor's tax return, or “transcript of return."
http://www.fulltaxtranscripts.com/tax-transcripts.php  FullTaxTranscripts.com

◙   Social Security Act - (protects income received by elderly, disabled, unemployed, welfare)

Attorney Organizations

◙   National Association of Consumer Bankruptcy Attorneys (NACBA)
 ◙   Commercial Law League of America
 ◙   American Bankruptcy Institute (ABI)
 ◙   BankruptcyMedia.com - includes status, bills, article, law update and search

The Court and Trustees, et al

◙   United States Bankruptcy Courts
◙   American Bankruptcy Law Journal - quarterly journal of the National Conference of Bankruptcy Judges
 ◙   United State Trustee Program (policies, etc)
 ◙   National Association of Bankruptcy Trustees (NABT)
 ◙   National Association of Chapter 13 Trustees (NACTT)
◙   Powerpoint by Tom Kadotani, UST's Office - changes for the Trustees under BARF (a good review for debtor attorneys).
 ◙   Debtor Education Approvals and Katrina Waivers  (press release from USTO-10-5-05)

Asset Searches and Other On-Line Information:

◙   Maricopa Justice and Municipal Courts.
◙   Maricopa Superior Court - cases
 ◙   Maricopa County Recorder's Office
 ◙   Arizona Department of Transportation
 ◙   PACER site for all US bankruptcy courts
◙   Arizona Secretary of State
 ◙   Arizona Corporation Commission
 ◙   AZ Dept of Economic Security - Child Support Enforcement
 ◙   Kelly Blue Book (vehicle valuation)
 ◙   Edmunds (vehicle valuation)
 ◙   Zip code information
 ◙   DEX - business and residence addresses and/or phone numbers
 ◙   Locator for companies by type, location and area.
◙  All 50 State's Exemptions (user beware)

 

Electronic Discussion Groups

 

◙   ABI's BAPCPA BLOG
 ◙   William S. Boyd School of Law, University of Nevada: send e-mail to: mailman-owner@law.unlv.edu - one of the best bankruptcy discussion groups
 ◙   FindLaw - several message Boards re: Debt & Bankruptcy
 ◙   Issues and Answers for attorney and trustees, also visit Chatter (Provided by King Bankruptcy Media)
 

Newsletters, Journals and Electronic Updates

 

◙   Findlaw - Newsletter Subscription Center - free summaries of all circuits, bankruptcy case summaries and topic newletters
 ◙   Findlaw - Bankruptcy Publications
 ◙   Free weekly e-mail from Bankruptcy Media.com

 

Means Testing

◙   Means Test Notes:
Transportation: The transportation standards consist of nationwide figures for monthly loan or lease payments referred to as ownership costs - from IRS.gov

◙  The 2004 Census Median Income figures and the IRS Standards that are need to complete the means testing forms effective October 17, 2005 - provided by US TE's office - (Note" we anticipate that the IRS Local Housing and Utilities Expense Standards will be separated into two components for east of use in the neat future).

 

Credit Counseling

◙   Credit Counseling Instructions, Application and Appendices for Approval

 

Debtor Education

◙   Instructions, Application and Appendices for Approval as a Provider

 

Miscellaneous Resources

 

Some Reform Act Provisions Effective Immediately.  Below are three most relevant to consumer bankruptcy practice. provided by www.BankruptcyMedia.com (4/23/05)

HOMESTEAD EXEMPTION

Section 322 of the Act amends Code § 522 to provide that the homestead exemption is limited to $125,000 if the home was purchased (or “the value was acquired”) within 1215 days (3 years 4 months) of filing the bankruptcy, unless from a prior homestead in the same state. The exemption is also limited to $125,000 if the debtor has been convicted of a felony showing abuse or if the debtor owes a debt arising from securities law violations, fiduciary fraud, racketeering, or intentional or reckless physical harm.

Section 322 of the Act also amends Code § 522(p)(1) to provide that the homestead exemption under any state exemption scheme may not exceed $125,000 for any property claimed as a homestead;

1) which was acquired by the debtor within 1215 days prior to filing the bankruptcy, or
2) where the court determines that the debtor has been convicted of a felony demonstrating that the filing of the case was an abuse of the provisions of the Bankruptcy Code, or
3) determines that the debtor owes a debt arising from a violation of federal or state securities laws, fiduciary fraud, racketeering, or crimes or intentional torts that caused serious bodily injury or death “in the preceding 5 years.” This limit also applies to certain other properties.

PRIORITY FOR EMPLOYEE WAGES

Section 1401 of the Act amends Code § 507(a), Employee Wage and Benefit Priorities is amended to increase the look back period for priority claims from 90 days to 180 days and increasing the total allowed priority claim from $4,925 to $10,000.

The effective date of this provision is date of enactment, but only applies to cases filed after that date.

LOOK BACK PERIOD FOR FRAUDULENT TRANSFERS EXTENDED

Section 1402 of the Act expands the look-back period for fraudulent transfers from one to two years and adds language to § 548 to allow avoidance of certain transfers to or for the benefit of insiders under employment contracts not in the ordinary course of business. The look-back expansion would apply only to cases filed one year after the date of enactment. Avoidability of the insider transfers would be effective on the date of enactment and applicable to cases filed on or after the date of enactment.

THE REQUIREMENT TO CONDUCT A “MEANS” TEST DOES NOT APPLY IN SOME CASES

Section 102 of the Bankruptcy Reform Act amends Bankruptcy Code § 707(b) to provide that where the debtor's income is too high a presumption of “abuse” arises for purposes of a motion to dismiss or convert. See Section 707(b)(7)(A) which provides that where the debtor’s family income is equal to or less than the median family income for the debtor’s state, there is no presumption of “abuse” within the meaning of section 707(b)(2).

The Act requires that any debtor whose income is above the median for the state must undergo scrutiny using the "means test" and, where, under the means test, the debtor's monthly surplus or disposable income is too high, he or she must elect Chapter 13 instead of Chapter 7.

However, the requirement to conduct the means test applies only to debtors whose debts are primarily consumer debts [Act, § 102(a); Bankruptcy Code § 707(b)(1)]; but most opinions hold that taxes, business debts and many tort claims are not consumer debts. Thus, the means test does not apply in those cases. [Taxes have been held not to be consumer debts for two fundamental reasons. First, consumer debts are voluntary, whereas taxes are involuntary; second, consumer debts are incurred to help the family household, whereas taxes are imposed to help the public at large.]
 

STATEMENT CRITICIZING THE REFORM ACT (from the House Judiciary Democrats) (54 page review) Bankruptcy Media (4/11/05)
House Judiciary Democrats' dissent from bankruptcy bill
A copy of the Democratic House Judiciary Staff's dissenting views on the bankruptcy bill was leaked to RAW STORY last night. The House vote—in which the bill is expected to pass—was scheduled for Wednesday but postponed to next week, likely because of members' desires to attend the Pope's funeral.
Dissenting Views on S. 256: Reform of the bankruptcy system, and the principle that every debtor should repay as much of her debt as she can reasonably afford, is a sound and uncontroversial idea. Were the legislation reported by the Judiciary Committee to bear any remote relationship to that laudable goal, this legislation would be wholly uncontroversial. Instead, by pressing legislation that is unbalanced and tilted toward specific special interest groups, the proponents of S. 256 have created a bill that would: impose monumental costs on the parties in the bankruptcy system, including the government; subject the “honest but unfortunate debtor” to coercion and loss of their legal rights; force businesses into unnecessary liquidation; and favor certain creditors over others.
FOR FULL 54-PAGE CRITIQUE CLICK HERE - http://rawstory.com/exclusives/dissenting_views_bankruptcy_405.htm

 

  

 

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