.jpg)
Discharge problem?
There are problems. There are two parts to 707. You can likely beat 707a by filing the case as a business case, but you must carefully list the business use of each debt in the description box on skd f.
The second problem arises under 707b.
The totality of the circumstances test may be applied. Generally a person with 150k of debts and no assets will be examined by the UST. Oddly, the general rule is that it is unreasonable to have more debt than can be repaid with 20% of one's yearly income. The UST does not have enough staff to object to debts above this conservative limit, but my general impression is that the UST does object when the debt is over 60k and over 200% of debtor's yearly income. (before the 2008 crash, they objected when over 70% of debtor's yearly income.)
So, you must address this issue in responding to sofa questions one and two. Sometimes I list ten years of income there to show the UST that the debtor borrowed in good faith.
Charge a high fee, or at least describe this issue in the retainer and state that you will require a second fee to reply UST inquiries and/or motions.
D
Sent from my iPhone
On May 31, 2012, at 6:53 AM, "Link W. Schrader" wrote:
> No. The presumption of nondischargeability period for cash advances over $875 (combined all creditors) is 70 days so creditors would have to prove in an adversary that the debtor took on the debt lacking an intent to repay the debt. It sounds like the debtor repaid similar debt in the past and planned on repaying this debt. Also, sounds like business debt so no means test to meet.
>
> Link W. Schrader, Attorney
> lschrader@schrader-law.com
> Mail: PO Box 3723, Tustin, CA 92781
> Office: 106 W 4th St, #308, Santa Ana, CA 92701
>
> Orange County: (714) 542-5922
> Los Angeles: (310) 413-6924 *
> San Diego: (619) 952-8342
> Facsimile: (310) 878-4158
> * Texts received at LA number only
>
> To: cdcbaa@yahoogroups.com
> Sent: Thu May 31 06:10:03 2012
> Subject: [cdcbaa] Discharge problem?
>
>
> PC came to me with over $150,000 in unsecured debt. When I inquire as to what the debt was generated by, he tells me that he used to be a professional stock trader and would use those checks that the credit card companies send to partially finance his trading activities. He would write checks to his trading account using it to trade and before the end of the zero percent period would expire would close out the stock position and pay off the check advance. He says all his trades and gains were properly reported on taxes and can prove that this was really how he made a living. In August 2010, he got caught flat footed when the market dropped suddenly and he was unable to close his positions in time and his trading account (on margin) was sold out. The brokerage company managed to cover but the various credit card company debts now remain outstanding. The client has no assets.
>
> Do you see an issue with discharging this unsecured debt to the credit card companies?
>
> Desiree Causey
> 714-375-6663
> Sent from my iPad
>
>
>
>
>
>
>
There are problems. There are two parts to 707. You can likely beat 707a by filing the case as a business case, but you must carefully list the business use of each debt in the description box on skd f. The second problem arises under 707b. The totality of the circumstances test may be applied. Generally a person with 150k of debts and no assets will be examined by the UST. Oddly, the general rule is that it is unreasonable to have more debt than can be repaid with 20% of one's yearly income. The UST does not have enough staff to object to debts above this conservative limit, but my general impression is that the UST does object when the debt is over 60k and over 200% of debtor's yearly income. (before the 2008 crash, they objected when over 70% of debtor's yearly income.)So, you must address this issue in responding to sofa questions one and two. Sometimes I list ten years of income there to show the UST that the debtor borrowed in good faith.Charge a high fee, or at least describe this issue in the retainer and state that you will require a second fee to reply UST inquiries and/or motions.DSent from my iPhoneOn May 31, 2012, at 6:53 AM, "Link W. Schrader" <lschrader@schrader-law.com> wrote:
No. The presumption of nondischargeability period for cash advances over $875 (combined all creditors) is 70 days so creditors would have to prove in an adversary that the debtor took on the debt lacking an intent to repay the debt. It sounds like the debtor repaid similar debt in the past and planned on repaying this debt. Also, sounds like business debt so no means test to meet.Link W. Schrader, Attorneylschrader@schrader-law.comMail: PO Box 3723, Tustin, CA 92781Office: 106 W 4th St, #308, Santa Ana, CA 92701Orange County: (714) 542-5922Los Angeles: (310) 413-6924 *San Diego: (619) 952-8342Facsimile: (310) 878-4158* Texts received at LA number only
From: cdcbaa@yahoogroups.com <cdcbaa@yahoogroups.com>To: cdcbaa@yahoogroups.com <cdcbaa@yahoogroups.com>Sent: Thu May 31 06:10:03 2012Subject: [cdcbaa] Discharge problem?
PC came to me with over $150,000 in unsecured debt. When I inquire as to what the debt was generated by, he tells me that he used to be a professional stock trader and would use those checks that the credit card companies send to partially finance his trading activities. He would write checks to his trading account using it to trade and before the end of the zero percent period would expire would close out the stock position and pay off the check advance. He says all his trades and gains were properly reported on taxes and can prove that this was really how he made a living. In August 2010, he got caught flat footed when the market dropped suddenly and he was unable to close his positions in time and his trading account (on margin) was sold out. The brokerage company managed to cover but the various credit card company debts now remain outstanding. The client has no assets.
Do you see an issue with discharging this unsecured debt to the credit card companies?
Desiree Causey
714-375-6663
Sent from my iPad
The post was migrated from Yahoo.
PC came to me with over $150,000 in unsecured debt. When I inquire as to what the debt was generated by, he tells me that he used to be a professional stock trader and would use those checks that the credit card companies send to partially finance his trading activities. He would write checks to his trading account using it to trade and before the end of the zero percent period would expire would close out the stock position and pay off the check advance. He says all his trades and gains were properly reported on taxes and can prove that this was really how he made a living. In August 2010, he got caught flat footed when the market dropped suddenly and he was unable to close his positions in time and his trading account (on margin) was sold out. The brokerage company managed to cover but the various credit card company debts now remain outstanding. The client has no assets.
Do you see an issue with discharging this unsecured debt to the credit card companies?
Desiree Causey
714-375-6663
Sent from my iPad
From lschrader@schrader-law.com Thu May 31 06:53:42 2012
Return-Path:
X-Sender: lschrader@schrader-law.com
X-Apparently-To: cdcbaa@yahoogroups.com
X-Received: (qmail 23744 invoked from network); 31 May 2012 13:53:42 -0000
X-Received: from unknown (98.137.35.161)
by m7.grp.sp2.yahoo.com with QMQP; 31 May 2012 13:53:42 -0000
X-Received: from unknown (HELO mail131.messagelabs.com) (216.82.242.99)
by mta5.grp.sp2.yahoo.com with SMTP; 31 May 2012 13:53:42 -0000
X-Env-Sender: lschrader@schrader-law.com
X-Msg-Ref: server-11.tower-131.messagelabs.com!1338472413!24017675!15
X-StarScan-Version: 6.5.10; banners=-,-,-
X-VirusChecked: Checked
X-Received: (qmail 14250 invoked from network); 31 May 2012 13:53:40 -0000
X-Received: from out001.collaborationhost.net (HELO out001.collaborationhost.net) (216.166.12.32)
by server-11.tower-131.messagelabs.com with RC4-SHA encrypted SMTP; 31 May 2012 13:53:40 -0000
X-Received: from AUSP01VMBX26.collaborationhost.net ([10.2.12.6]) by
AUSP01MHUB02.collaborationhost.net ([10.2.8.26]) with mapi; Thu, 31 May 2012
08:53:27 -0500
To: "cdcbaa@yahoogroups.com"
Date: Thu, 31 May 2012 08:53:27 -0500
Thread-Topic: [cdcbaa] Discharge problem?
Thread-Index: Ac0/HfjKJ2uRHz5nSOyElHhe1sZz9wAFsgyb
Message-ID:
Accept-Language: en-US
X-MS-Has-Attach:
X-MS-TNEF-Correlator:
acceptlanguage: en-US
MIME-Version: 1.0
X-Originating-IP: 216.82.242.99
X-eGroups-Msg-Info: 1:12:0:0:0
Subject: Re: [cdcbaa] Discharge problem?
X-Yahoo-Group-Post: member; u1359981; yWMwgJXpoiDPaIm227AuX-6DujrNhcIYJmePFtjvuxZyz7wGQZY
The post was migrated from Yahoo.