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Did you know that you can buy a “new” car in a CHAPTER 13 BANKRUPTCY?

It’s true. You can buy a “new” (new used or sometimes even brand new) during your CHAPTER 13 BANKRUPTCY. Our Trustee, Tom McDonald, put together a program with several local dealers that allows debtors to purchase and finance a new car during their Chapter 13 proceeding. Sounds too good to be true – just wait until we sit down and really discuss the benefits of Chapter 13 – you will learn about the most powerful financial reorganization tool in the free world. Our State of the Art Computer system allows us to serve all of the Counties and Cities in the North East Michigan including: Saginaw (Saginaw, Frankenmuth, Chesaning, St. Charles, Hemlock, Shields, Freeland, Carrollton ); Bay (Bay City, Essexville, Auburn, Kawkawlin, Linwood, Pinconning, Standish);…

What are the DEBT LIMITS for filing a CHAPTER 13 BANKRUPTCY?

In order to qualify for a Chapter 13 Bankruptcy you are limited by the amount of your debt obligations by class: secured and unsecured. You can have up to $1,081,400 in secured debt and still file a Chapter 13 Bankruptcy in Michigan. You can have up to $360,475 in unsecured debt and still file a Chapter 13 Bankruptcy in Michigan. If you exceed either one of these debt limitations – you will be forced to file a Chapter 11 Bankruptcy – just like NFL Quarterback Michael Vick. Our State of the Art Computer system allows us to serve all of the Counties and Cities in the North East Michigan including: Saginaw (Saginaw, Frankenmuth, Chesaning, St. Charles, Hemlock, Shields, Freeland, Carrollton ); Bay (Bay City, Essexville,…

Michigan Bankruptcy- In Chapter 13 Can You Choose Between Paying a Set Fee or On An Hourly Basis?

Michigan Bankruptcy Fee or Hourly Basis Fee. Each 2016(b) statement provides for compensation to be either a stated flat fee; or payment of a stated retainer amount against which the attorney would bill at a specific hourly rate, with debtor agreeing to pay all Court approved fees exceeding the retainer.  During the consideration of a Ch. 13 fee application the argument was offered…that it was local custom and practice regardless of the statement, to give a fee Applicant the option to accept the stated flat fee, or file a fee application on an hourly rate basis, with there being no cap amount (on fees charged)  established.  Contrarily Judge Shapero ruled Applicant is incorrect in this view when the option isn’t presented first in the 2016(b),…

Michigan Bankruptcy – 6th Circuit Says Avoidance Powers Allowed By Ch. 13 Debtor

Bankruptcy in Michigan-Avoidance Powers and Chapter 13. The issue of whether a Ch. 13 debtor has standing to exercise avoidance powers (normally) exclusive to the Standing Trustee was reviewed by a 6th Circuit Panel.  The Bankruptcy Court for the Eastern District of KY held that Debtor Gary Barbee has standing to initiate an avoidance action, and that a bank’s lien was escapable because it wasn’t on the manufactured home title, nor had the home been converted (legally) to real property.  U.S. Bank National Assoc., as Trustee, appealed.  The Bankruptcy Code defines property broadly as “anything of value that the debtors have”.  A security interest is “a lien created by agreement”, USCA Sec. 101(51).  Property interests are governed by state law unless there is some overriding…

No Automatic Stay For Child Custody Legal Fees

In the midst of a protracted child custody dispute, a Debtor filed a Ch. 13.  Previously this Debtor was ordered to pay legal fees incurred from the custody case. A non-bankruptcy Court may determine if the automatic stay applies toward a debt.  U.S. District Courts have appellate jurisdiction over decisions of the Bankruptcy Court.  The Opinion from the Eastern District of MI, Southern Division District Court agreed with the Orders of the Bankruptcy Court. The Bankruptcy Court correctly found there should be relief from an automatic stay here.  A state Circuit Court had already pronounced the legal fees of a child custody dispute as non-dischargeable.  The Bankruptcy Court also found that as the exception to the automatic stay did apply… the state Circuit Court was…

Appeals Court says SSI isn’t disposable income in Chapter 13.

Baud is an opinion from the 6th Circuit Court of Appeals.  DMI is a projected figure, and in this case, when debtors were above median income filers, whether or not it was available primarily depended upon if SSI benefits may be included in the determining calculation.  Through analyzing relevant statutes 6th Circuit concluded in Baud any projected DMI determination “must not include items – such as” SSI benefits.  6th interpreted such items as already excluded from the CMI definition, per Bankruptcy Code, Sec. 101(10(A)).  The exclusion of SSI and the like is permitted. It follows then, if SSI isn’t considered in CMI, then it can’t figure into a DMI calculation either.  (When DMI equals subtracting allowable monthly expenses from CMI) Decided in Baud also, is that…

Court cites Baud as a precedent in Tobias decision. Agrees SSI is not disposable income.

Tobias was a Court decision made in the Eastern District of MI, Southern Division.  In making the Tobias opinion, the Court specifically requested briefs from parties on Baud and the impact of it on the present case’s Confirmation. Leading up to this decision the 13 Trustee hadn’t filed any formal objection, but refused to approve of Plan Confirmation.  Debtor Tobias held that Baud applied. Although Trustee argued SSI needed to be figured into DMI because to not do so is bad faith…since Trustee hadn’t filed an objection based on that, nor even raised that concern specifically at Confirmation, the Court didn’t issue any bad faith decision here, then. The Court stated Baud was binding in the instant case.  Debtor Tobias was not required to include…

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