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Individual Ch. 7 vs. Ch. 11 and means test
Yes, I would argue that Lanning's instructions in Ch13's MeansTestforeseeable changes in expenses should be construed to apply in the Ch7 context
rethe amount of expenses allowed under the MeansTest.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
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To: cdcbaa@yahoogroups.com
Sent: Tue, October 26, 2010 11:19:24 AM
Subject: Re: [cdcbaa] Individual Ch. 7 vs. Ch. 11 and means test
I understand that and am not asking how to calculate the plan payment in aChapter 11 for individuals (although it's far from clear what that amount would
be---a topic for another thread); I'm just wondering how/if one can argue that
the costs of a hypothetical Ch. 11 should be factored into the analysis foreligibility in a Chapter 7 context (either as part of the means test, or torebut the presumption of abuse).
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at
The post was migrated from Yahoo.
I would agree when the reason for the inability to "qualify" for the
other chapter is simply the debtor having too many unnecessary
expenses. But it's rare that attorneys fees and costs of
administration would be the sticking point for a debtor going into a
Chapter 13 whereas it is almost always the case in a Chapter 11.
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this
means at
The post was migrated from Yahoo.
charset="windows-1251"
Inability to qualify for one chapter is NOT a basis for overriding
requirements of another chapter. We had this discussion when people claimed
that they could not do a C13.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Mark J. Markus
Sent: Tuesday, October 26, 2010 10:51 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Individual Ch. 7 vs. Ch. 11 and means test
Do any of you have experience with doing a Chapter 7 case for an individual
where they show a surplus on the means test but you argued the Chapter 11
costs (i.e. attorneys fees) would eat up the surplus and make it impossible
to do a Chapter 11?
I have a potential case where the client is showing about $2,500 a month in
surplus income on the means test, and has over $600,000 of unsecured debt.
Ch. 11 attorneys fees (let's just say conservatively) would be $25,000.
Would that figure be spread out over 60 months, or since it would be
normally a required up front retainer would the inability of the debtor to
generate that factor into anything?
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at
The post was migrated from Yahoo.
I understand that and am not asking how to calculate the plan
payment in a Chapter 11 for individuals (although it's far from
clear what that amount would be---a topic for another thread); I'm
just wondering how/if one can argue that the costs of a hypothetical
Ch. 11 should be factored into the analysis for eligibility in a
Chapter 7 context (either as part of the means test, or to rebut the
presumption of abuse).
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this
means at
The post was migrated from Yahoo.
I haven't dealt with that yet but as a Chapter 11 attorney, I agree with your point. The UST would have to relax its requirements significantly to make the individual chapter 11 process cheaper before a debtor can easily afford an 11 so that the ust can say it's bad faith not to file an 11 instead of a 7. BTW, I would handle a chapter 11 case without a substantial retainer only for my mother. That's it. As for spreading my fee over 60 months, I've never done that and since you have to reserve a good number of hours of your time for 11s (instead of taking 7s or13s or even other 11s), I require payment of the balance of my fees and costs by the effective date or soon thereafter.
BTW, you also have the prohibition of slavery argument in light of the 1115 inclusion of post-petition earnings.
Sent from my iPad
On Oct 26, 2010, at 10:51 AM, "Mark J. Markus" wrote:
> Do any of you have experience with doing a Chapter 7 case for an individual where they show a surplus on the means test but you argued the Chapter 11 costs (i.e. attorneys fees) would eat up the surplus and make it impossible to do a Chapter 11?
>
> I have a potential case where the client is showing about $2,500 a month in surplus income on the means test, and has over $600,000 of unsecured debt. Ch. 11 attorneys fees (let's just say conservatively) would be $25,000. Would that figure be spread out over 60 months, or since it would be normally a required up front retainer would the inability of the debtor to generate that factor into anything?
>
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)509-1460 (fax)
> web: http://www.bklaw.com/
> This Firm is a Qualified Federal Debt Relief Agency (see what this means at http://bklaw.com/bankruptcy-blog/2008/0 ... efinition/)
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
>> ___
>
>
I haven't dealt with that yet but as a Chapter 11 attorney, I agree with your point. The UST would have to relax its requirements significantly to make the individual chapter 11 process cheaper before a debtor can easily afford an 11 so that the ust can say it's bad faith not to file an 11 instead of a 7. BTW, I would handle a chapter 11 case without a substantial retainer only for my mother. That's it. As for spreading my fee over 60 months, I've never done that and since you have to reserve a good number of hours of your time for 11s (instead of taking 7s or13s or even other 11s), I require payment of the balance of my fees and costs by the effective date or soon thereafter. BTW, you also have the prohibition of slavery argument in light of the 1115 inclusion of post-petition earnings.Sent from my iPadOn Oct 26, 2010, at 10:51 AM, "Mark J. Markus" <bklawr@yahoo.com> wrote:
Do any of you have experience with doing a Chapter 7 case for an
individual where they show a surplus on the means test but you
argued the Chapter 11 costs (i.e. attorneys fees) would eat up the
surplus and make it impossible to do a Chapter 11?
I have a potential case where the client is showing about $2,500 a
month in surplus income on the means test, and has over $600,000
of unsecured debt. Ch. 11 attorneys fees (let's just say
conservatively) would be $25,000. Would that figure be spread out
over 60 months, or since it would be normally a required up front
retainer would the inability of the debtor to generate that factor
into anything?
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this
means at
The post was migrated from Yahoo.
Arguably, only 1325(b)(2) is applicableunder 1129(a)(15), so no "Means Test" in
Ch11.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH
IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL
AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE
IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR
DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT
ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY
PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
________________________________
To: cdcbaa@yahoogroups.com
Sent: Tue, October 26, 2010 10:51:29 AM
Subject: [cdcbaa] Individual Ch. 7 vs. Ch. 11 and means test
Do any of you have experience with doing a Chapter 7 case for an individualwhere they show a surplus on the means test but you argued the Chapter 11 costs
(i.e. attorneys fees) would eat up the surplus and make it impossible to do a
Chapter 11?
I have a potential case where the client is showing about $2,500 a month insurplus income on the means test, and has over $600,000 of unsecured debt.11 attorneys fees (let's just say conservatively) would be $25,000. Would that
figure be spread out over 60 months, or since it would be normally a required up
front retainer would the inability of the debtor to generate that factor into
anything?
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this means at
The post was migrated from Yahoo.
Do any of you have experience with doing a Chapter 7 case for an
individual where they show a surplus on the means test but you
argued the Chapter 11 costs (i.e. attorneys fees) would eat up the
surplus and make it impossible to do a Chapter 11?
I have a potential case where the client is showing about $2,500 a
month in surplus income on the means test, and has over $600,000 of
unsecured debt. Ch. 11 attorneys fees (let's just say
conservatively) would be $25,000. Would that figure be spread out
over 60 months, or since it would be normally a required up front
retainer would the inability of the debtor to generate that factor
into anything?
*************************
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web: http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency (see what this
means at
The post was migrated from Yahoo.