Tag Archives: bankruptcy

Can I File a Joint Bankruptcy Petition with my Same Sex Spouse?

By Ryan C. Wood


Under 11 U.S.C. §302, if you are legally married, both you and your spouse will be able to file a joint bankruptcy petition and receive the benefits provided under the Bankruptcy Code. The Defense of Marriage Act (DOMA) that was signed into law on September 21, 1996, defines marriage as a legal union between one man and one woman and therefore prohibits the federal government from recognizing legal marriages of same sex couples. Bankruptcy court falls under federal jurisdiction. What does this mean? It means that bankruptcy courts will not recognize same sex couples as legally married and could potentially deny a same sex couple to file a bankruptcy together. This would mean higher costs for a same sex couple as they may potentially need to file two separate petitions and pay two separate filing fees.

All is not lost, however. On February 21, 2011, President Obama declared that the Defense of Marriage Act should be repealed and Attorney General Eric Holder indicated that the Obama Administration will no longer assert the constitutionality of the DOMA in Court. Prior to this, the U.S. Trustees or the Trustees administrating the individual cases would raise the objection in court and seek to dismiss the case if a same sex couple filed a joint bankruptcy petition. It would have been up to the individual judges who may dismiss the case for cause. The courts look at each case on a case-by-case basis and makes a decision based on the circumstances including what is the best interest of the debtors and creditors.

So if the United State Trustee, an arm of the Department of Justice, no longer defends the DOMA in court and defending DOMA to dismiss a case based on the marriage of a same sex couple, does that mean you now get to file a joint bankruptcy petition with your same sex spouse? That is most likely the case. If the trustee doesn’t object based on this issue the only other parties in interest that may have standing to object to your petition would be the creditors in your case. They would most likely not object due to the costs involved in hiring a bankruptcy attorney and the fact that it may also benefit the creditors to have the case be jointly administered if the debts were jointly incurred. Additionally, the creditor may receive a lot of negative publicity if they were to object to a joint case based on a same sex marriage. But ultimately the classic answers many bankruptcy lawyers give to questions is it depends upon the circumstances.

The Supreme Court is set to hear two same sex marriage cases. California’s Proposition 8 case will be heard on March 26, 2013 in Hollingsworth v. Perry. Windsor v. United States will be heard on March 27, 2013. We will wait and see what the Supreme Court has to say about same sex marriages and the constitutionality of DOMA.

Can I Buy A House After Bankruptcy?

By Ryan C. Wood


The question of whether you can buy a house after bankruptcy is one of the most frequently asked questions. Most bankruptcy lawyers give the somewhat helpful answer that “it depends.” A lot of people think that they will be automatically denied a loan after filing bankruptcy, but that is not true. Banks look at a lot of different factors when they are deciding whether to extend credit to you. They look at your credit score, your income, how long you have been employed, how much debt you have, how big of a down payment you are putting down, and many other factors. If you have filed for bankruptcy already you will not have any debt weighing you down. If you add in the fact that you have been steadily employed making decent money and you have been saving all your money (since all your unsecured debt was discharged in your bankruptcy case), it may be possible that a bank would extend credit to you to buy a home.

Whether the bank is willing to extend credit to you also depends on the economy and the credit situation at that time. When the real estate market was on the rise people were able to buy a house a couple years after filing bankruptcy. Right after the real estate market came crashing down even people that had perfect credit were not able to obtain loans because the banks were really tight with their money. An example of this is a self-employed individual with a credit score in the 800s. She was willing to put a 50% down payment on the home. The banks refused to lend her credit because she was self-employed and therefore, according to the banks, higher risk that the business would fail and she would be unable to repay the mortgage.

Even if a bank is willing to extend credit to you to buy a home one factor you need to look at is what interest rate you will be charged. If you have filed for bankruptcy recently the interest rate may be higher. One possible way that your interest may be lower is if you have a co-signer that has a great credit to buy the home with you. You need to be sure you can afford to repay the loan with the interest included before you sign on the dotted line and incur more debt or you may need the services of a bankruptcy lawyer. You may potentially be able to refinance the home at a lower rate in the future if your house has equity and you have been steadily maintaining your credit, but that is not something you should be banking on when you are incurring the debt because it may never happen.

Bottom line: it is very possible to obtain credit to buy a house even after filing for bankruptcy depending on what the economic situation is like.

Can My Debts Related To A Car Accident Be Discharged In Bankruptcy?

By Ryan C. Wood

The impact of a car accident may be emotionally and physically devastating. It is even more devastating when it has been determined the car accident was entirely or even partially your fault. What happens when you are underinsured or not insured at the time of the accident? The impact of such an event may cause your finances to spin out of control.

If you are financially responsible for a car accident you need to take a look into all the options that are available for you. One of the options is that you may be able to file for bankruptcy to discharge those debts depending on your circumstances. Normally your debts related to a car accident are dischargeable. This is true whether the debts are related to personal injury or property damage. There are two exceptions where the debts arising from a car accident are not dischargeable in bankruptcy. Many bankruptcy lawyers mistakenly believe that any debt incurred resulting from a car accident, whether insured or not, is not dischargeable when filing bankruptcy.

The first exception is if the accident was the result of you driving under the influence and you caused a death or personal injury to the other party or parties. Your financial obligations to pay any criminal fines, court fees, restitution, and bodily injury to the other party are not dischargeable if it is the result of a DUI. That means you would need to pay for the debts yourself. The only portion of your debts that would be dischargeable is property damage related to the DUI.

The other exception is if the accident was the result of a willful or malicious injury caused by you to another entity or to the property of another entity. An example of this could be if you deliberately ran your car into your neighbor’s fence because you hated the sight of the fence. Under this exception, both personal injury and property damage are not dischargeable in bankruptcy.

So what happens if you are financially responsible for the debts caused by a DUI or your willful or malicious injury to another person and you do not have the funds to repay the debt? Although the debts are not dischargeable in a Chapter 7 bankruptcy you can file a Chapter 13 to repay the debts in installments of up to five (5) years. If the debts cannot be repaid within the 5 years due to your financial circumstances you may always file another Chapter 13 bankruptcy to pay the remaining balance.

If you owe a debt related to a DUI or willful or malicious injury it is best to seek the advice of experienced bankruptcy attorneys. They will be able to draft a Chapter 13 plan that will help you repay the debts and hopefully you can move on with your life.

Are Unemployment Insurance Taxes Dischargeable in Bankruptcy?

By Ryan C. Wood

If you own or used to own a business or corporation and you are considered the person responsible for paying the unemployment insurance taxes, one question you may have is whether the unemployment insurance taxes are dischargeable in bankruptcy? This is definitely a concern for business owners that have failing businesses and do not have the resources to pay back the unemployment insurance taxes. Please speak with a bankruptcy lawyer in your jurisdiction before making hard choices. The Ninth Circuit Bankruptcy Appellate Panel (BAP) addressed this issue in State of California Employment Development Department v. Hansen, 470 B.R. 535 (April 2012).

The 9th Circuit BAP in the Hansen case ruled that unemployment insurance taxes were indeed dischargeable in bankruptcy despite the California Employment Development Department (EDD)’s claims. In the Hansen case the EDD claimed that unemployment insurance taxes were considered a priority tax under 11 U.S.C. §507(a)(8)(C), a tax required to be collected or withheld and for which the debtor is liable in whatever capacity, and therefore considered nondischargeable under 11 U.S.C. §523(a)(1)(A). The Hansens argued that unemployment insurance taxes did not fall under §507(a)(8)(C) because the unemployment insurance tax was not a tax that is required to be collected by the debtor from a third party. The unemployment insurance tax is not withheld from employee’s paychecks. Therefore it is not a tax where it is collected from the employee to be paid by the employer to a government agency. The unemployment insurance tax is only paid by the employer to EDD.

The 9th Circuit BAP resolved this issue by taking a look at the legislative history to see if they could determine what Congress meant when they wrote §507(a)(8)(C). We only look at the legislative history when the law itself is ambiguous. The BAP concluded that legislative history showed that under §507(a)(8)(C) the tax must be collected from a third party. In this case, the employer (Hansen) was directly responsible for paying the unemployment insurance taxes to EDD. Since unemployment insurance taxes do not fall under §507(a)(8)(C) it does not fall under the §523(a)(1)(A) category of a nondischargeable debt and therefore unemployment insurance taxes are dischargeable. §523(a)(1)(A) basically states that it must be considered a tax under §507(a)(8) or §507(a)(3).

One thing bankruptcy lawyers should note is that although unemployment insurance taxes do not fall under the §523(a)(1)(A) category of nondischargeability, it must not fall under any other categories of nondischargeability in §523. One category to note is §523(a)(2) which is essentially obtaining credit based on fraud or misrepresentation. If there was no fraud or misrepresentation involved then your unemployment insurance taxes would most likely be dischargeable.

Bankruptcy Filing Fees Increase as of November 1, 2011

By Ryan C. Wood

The cost of living continually increases over and over again.  When this was originally written the Court filing fees were increasing and since unfortunately increased again.  The Court filing fee to file a chapter 7 bankruptcy case is now $335 and chapter 13 bankruptcy $310.  No doubt due to COVID-19 the federal government will use it to increase the court filing fees again.  These increases became effective December 1, 2016.

The percentage increase of the Court filing fees over the years are far higher than the cost-of-living for average people though.  Ask your bankruptcy attorney more about how their attorney fees and expenses have changed over the years at a lesser increase than the court filing fees. 

Court Filing Fee 2011 Increases  

Starting November 1, 2011, a lot of the fees related to filing documents in your bankruptcy case will be increasing.   The most important ones that are relevant to you are the fees to file your Chapter 7 bankruptcy case or Chapter 13 bankruptcy case.  The Judicial Conference of the United States adopted new court fee schedules.  On November 1, 2011, your Chapter 7 bankruptcy court filing fees will increase from $299 to $306.  Your Chapter 13 bankruptcy court filing fees will increase from $274 to $281.  This means that if you wanted to file a bankruptcy case, it may be more beneficial for you to file on or before October 31, 2011 before the price increases.  Although it is only a seven dollar ($7) increase, every penny counts.   A mere $7 could buy you a satisfying meal.

If you already retained an attorney to represent you in your Chapter 7 or Chapter 13 bankruptcy case it would be advisable to pay your fees in full or provide them with the necessary paperwork to file your case as soon as possible so that you do not have to pay more money for the court filing fees.  

For those of you who have already filed your bankruptcy case, this price increase does not affect you, as it is for people that file new bankruptcy cases after November 1, 2011.

Additionally, people whom seek to file fee waivers for their bankruptcy filing fee are still subject to the same rules prior to the fee increase.  Whether or not you qualify for a fee waiver always depends on the circumstances.  A judge will not grant a fee waiver unless your income is less than 150% of the poverty level and you cannot afford to pay the fee in installments.  Even if you do not qualify for the fee waiver, the judge may potentially grant your application to pay the increased filing fee in installments.

Besides filing fees for Chapter 7 and Chapter 13 bankruptcy cases another fee increase that may be relevant to you is the fees for filing an amendment to your Schedules D, E, F and Creditor Matrix in your bankruptcy case.  The fees have increased from $26 to $30.  Hopefully your bankruptcy lawyer and you reviewed the petition carefully before filing it so no amendments need be made.   

Chapter 13 No Look Fees Increased Northern District of California

The no look chapter 13 bankruptcy attorney fees in the Northern District of California finally increased and become consistent between all divisions.  A district wide model chapter 13 plan was approved and along with that plan new increased no look fees.  The no look fees are presumptively deemed reasonable for the various things listed.  No fee application is supposed to be filed itemizing time spent and why when requesting no look fees.