Bankruptcy

Sometimes the Evil Creditor who Sues You, or EVEN the IRS, can be Your Best Bankruptcy Buddy in a Chapter 7

By Joseph McDaniel, Esq.

Bankruptcy law after the 2005 Amendments is even more odd than the real world.

There are things your bankruptcy lawyer has to say ("I'm a debt relief agency. No, I'm not a human being. I'm a debt relief agency!") and there are things he can't say, even if he's ethically obligated to provide the best advice he's able to provide under his state ethical rules.

For instance, EVEN IF it would be in the best interest of the potential debtor to incur new debt prior to filing a bankruptcy, the bankruptcy lawyer CANNOT advise it, pursuant to the Patently Unconstitutional 2005 Amendments to the Bankruptcy Code (the "BARF" Act).

Just in passing, let me point out that I'm not a dumb as I look (some might say that's not even possible, you know?). As a result, I will never, ever, ever advise a client in a way not permitted under the Bankruptcy Code, and I will have to answer to my maker and my stomach lining for that someday, I suppose.

But this post isn't about how dumb I am (except indirectly).

It's about how insolvency and the BARF Act turn reality upside down and all Alice-in-Wonderlandish.

For instance, if a client does NOT pass the means test, and then get sued, and garnishments ensue, he MIGHT then pass the means test. So the persecutor becomes the protector!

And if you're really lucky, the garnishing creditor also gets sued by the Chapter 7 Bankruptcy Trustee for receiving a preference in the 90 days prior to filing!!

But that would just be the cherry on top of the Sundae.

Or if the debtor did not pass the means test, but was forced into a brutal payment plan by the IRS, perhaps that would permit the debtor to pass the means test!

It is a strange world we live in during this depression, ladies and gentlemen.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on April 09, 2010 (boomark / email).