Why Creditors Should Get Less in Chapter 13

Spending every dollar they make, and then some, is often how our Chapter 13 clients got into financial trouble.

Yet Chapter 13, as practiced, validates the practice of continuing to spend 100% of each month’s income during the life of the plan. In doing so, we, as a society, squander the chance to use Chapter 13 to teach new budgeting habits.

Shame on us!

It was more obvious before BAPCPA: we calculated the debtor’s projected income and living expenses, and all of what was on the bottom line was paid into . . .

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moran_cathy

Head of Moran Law Group

Cathy Moran has headed her own small firm Moran Law Group in Redwood City, California, for nearly 30 years. Family law and tax issues as they play out in bankruptcy are areas of particular interest to Cathy.

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