The Debt and the Lien: Two Completely Different Problems

Debtors could not deduct from their disposable income a $300 per month expenditure for tobacco products as a “special circumstance.”

It is appropriate that the title of this article is based on the lyrics from Dire Straits’ biggest hit, since that is where many below-median debtors find themselves – in dire straits.

Bankruptcy lawyers can better present non-mortgage homeownership expenses to reflect current economic realities on the means test. By advocating for realistic expense allowances, based on a percentage of the home’s purchase price, attorneys can ensure fairer assessments and more successful bankruptcy plans. Additionally, Trustees and Judges should look at Atty Moran’s analysis here – change will take the whole village.

Just because a Chapter 13 plan satisfies the disposable income test does not mean it passes the good faith test particularly if luxury items are involved.