Source: http://doney.net/bkinfo/flowchart_text.htm
Timestamp: 2018-01-22 14:20:18
Document Index: 105113839

Matched Legal Cases: ['§362', '§362', '§362', '§362', '§362', '§362', '§362', '§109', '§362', '§727', '§1328', '§109', '§109', '§109', '§109', '§109', '§111', '§101', '§101', '§707', '§707', '§707', '§707', '§ 101', '§707', '§707', '§707', '§707', '§727', '§1328', '§111', '§111', '§111', '§727', '§727', '§523', '§727', '§523', '§727', '§523', '§523', '§1328', '§523', '§1328', '§523', '§1328']

The Flowchart to a Fresh Start · Our flowchart gives a step by step outline of the route to getting a discharge of debt under the Bankruptcy Code as amended by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Start — Effect of Prior Bankruptcies
Automatic Stay under §362. Section 362 affords debtors the protection from creditors by staying, or stopping, most creditor's collection activities. The stay is subject to certain limitations:
Termination in 30 days. If a Chapter 7, 11 or 13 case is filed within one year of the dismissal of a prior case, the stay will terminate on the 30th day after the filing of the previous case unless— [§362(c)(3)]
The prior case was filed under Chapter 7 and was dismissed because it did not meet the Means Test under section 707(b), and the present case is not filed under Chapter 7, or [§362(c)(3)]
The debtor (or other party in interest) moves for a continuation of the stay and demonstrates that the second case was filed in good faith with respect to the creditor sought to be stayed. [§362(c)(3)(B) & (C)]
No stay. If a Chapter 7, 11 or 13 case is filed within one year of the dismissal of more than one prior cases, the stay will not go into effect unless-- [§362(c)(4)(A)]
The prior cases were filed under Chapter 7 and was dismissed because it did not meet the Means Test under section 707(b), and the present case is not filed under Chapter 7, or [§362(c)(4)(A)]
The debtor (or other party in interest) moves for a continuation of the stay and demonstrates that the present case was filed in good faith with respect to the creditor sought to be stayed. [§362(c)(4)(B), (C) & (D)]
Prior case pending within preceding 180 days. An individual or family farmer may be a debtor under this title who has been a debtor in a any other case pending in the preceding 180 days if— [§109(g)]
The debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay provided by §362.
Discharge will not be granted. A prior bankruptcy proceed prevents the granting of a discharge in cases filed within a certain time period before the filing of the present case:
Waiting Period Before Filing New Case
Case Present Case
Chapter 7 8 years after prior case filed 4 years after prior case filed (?)
Chapter 11 8 years after prior case filed 4 years after prior case filed (?)
Chapter 13 6 years after prior case filed 2 years after prior case filed (?)
§727(a)(8), dealing with Chapter 7 cases, states that the time periods are from the date of filing of a previous case in which a discharge was entered. Notwithstanding Congressional testimony that the BAPCPA was so perfect that not a word need be changed, §1328(f), which deals with Chapter 13 cases, is ambiguous. A grammatical reading of that subsection would start the 4 or 2 year waiting period from the date that a previous case was filed. An argument could be made that the start of the waiting period instead refers to when "the debtor has received a discharge." Policy arguments and legislative history might support the discharge for the start of the waiting period, and it would seem to make little sense to impose a 2 year wait from the filing of a Chapter 13 in which the minimum period of payments before discharge is 3 years (although a discharge may be granted earlier under certain limited circumstances).
When discharge might not be the objective. If the intent is to prevent foreclosure, repossession, tax levy, or other creditor action, a Chapter 13 could reasonably be filed even though a discharge would not be obtained.
Credit Counseling Agency Briefing
Briefing required. An individual cannot file Chapter 7, 11 or 13 unless he or she has received individual or group credit counseling (including phone and internet) during the 180-day period preceding the date of filing of the petition. [§109(h)(1)]
Contents. The briefing is to (1) outline the opportunities for available credit counseling and (2) assist the individual in performing a related budget analysis. [§109(h)(1)]
Temporary waiver. This briefing requirement may be temporarily waived if the debtor submits a certification describing exigent circumstances meriting the waiver, and stating that the debtor requested credit counseling services, but was unable to receive it within 5-days from the request. The debtor must receive counseling within 30 days of filing the petition, or an additional 15 days if extended by the court. [§109(h)(3)]
When not required. The briefing by a credit counseling agency is not required:
if the United States trustee has determined that approved the approved nonprofit budget and credit counseling agencies for the district are not able to provide the required briefing, or [§109(h)(2)(A)]
if, after notice and hearing, the court finds that the debtor is unable to complete those requirements because of incapacity, disability, or active military duty in a military combat zone. [§109(h)(4)]
Credit counseling agency requirements. Requirements are stated in §111.
Defined. "Current monthly income" is defined as the debtors' average monthly income from all sources (including non-taxable sources) derived during the 6-month period preceding the date of determination. [§101(10A)(A)]
Excluded from income. "Current monthly income" does not include security benefits, payments to victims of war crimes, international terrorism, or domestic terrorism. [§101(10A)(B)]
Spouse's income in non-joint cases. The income which will be compared to the median income in the state will include income of a non-filing spouse, unless the spouses are legally separated or living separate and the debtor files a statement under penalty of perjury. [§707(b)(7)] A non-filing spouse's income is not specifically included in the Means Test itself. [§707(b)(2)(A)(i)]
Problem for self employed debtors. The definition for "current monthly income" does not make any special reference to self employment or other business income. While any reasonable definition of income from a business would reference the net income remaining after deducting the expenses of producing the income, we can find no provision for that calculation in the bankruptcy code as amended. The expenses which the amended code allows to be deducted has no specific provision for self employment either, but section 707(b)(2)(B)(i) allows adjustments for "such special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative."
Median Income in the State
Comparing monthly income. The debtor's "current monthly income" is multiplied by 12 and compared with the median income in the state in which the debtor resides as last reported by the Bureau of the Census.
Comparison based on number in household.
Household of 1: If there is only 1 person in the debtor's household, his or her income is compared with the median family income for 1 earner last reported by the Bureau of the Census.
Household of 2, 3 or 4. For a household of 2, 3, or 4, the debtor's household income is compared with the highest median family income of the applicable State for a family of the same number or fewer individuals last reported by the Bureau of the Census.
Household of more than 4. For a household with more 4 individuals, the debtor's household income is compared with the highest median family income of the applicable State for a family of 4 or fewer individuals last reported by the Bureau of the Census, plus $525 per month for each individual in excess of 4.
[§707(b)(6), §707(b)(7)]
Adjustment of Bureau of Census income data. If the income reported by the Bureau of Census is not calculated and reported for the current year, it is to be adjusted to "reflect the percentage change in the Consumer Price Index." [§ 101(39A)]
Bureau of Census links:
Median Family Income by Family Size (for households of 2 to 7 persons in 2003 dollars)
[http://www.census.gov/hhes/www/income/medincearnersandstate.html]
Median Family Income by Number of Earners in Family (giving income for 1 person households)
2003 Census Data for Arizona
The data needed for means test is located at the U.S. Trustee's Means Test page.
Who is in the household? The section of the code dealing with the comparison to the median income does not define "household" or specify who would be included in it. Since extensive reference is made to IRS regulations in that portion of section 707 dealing with expenses, those regulations may provide guidance for those who may be included in the household. IRS guidelines suggest that the household includes persons that "live with you for the entire year as a member of your household." Blood or legal relationship do not appear to be a requirement, but "A person is not considered a member of your household if, at any time during the tax year, your relationship with that person violates local law." See Topic 354-Dependents on the IRS web site.
See also Needs Based Bankruptcy--Explanation of §707.
The debtor's monthly expenses include:
Food & clothing expenses may be increased by 5% above the allowance when "reasonable & necessary."
Housing. Usually, only expenses for the place of residence are considered to be necessary. Housing expenses include: mortgage or rent, property taxes, interest, parking, necessary maintenance and repair, homeowner's or renter's insurance, homeowner dues and condominium fees.
Transportation. Vehicle insurance, vehicle payment (lease or purchase), maintenance, fuel, state and local registration, required vehicle inspection, parking fees, tolls, driver's license, public transportation. Transportation costs not required to produce income or ensure health and welfare are not necessary.
Charitable contributions. These expenses include donations to tax exempt organizations such as: civic organizations, religious organizations (tithing and educational), and medical services or associations. To be necessary, charitable contributions have to provide for the health and welfare of the taxpayer or taxpayer's family; or be a condition of employment.
Child care. Baby sitting, day care, nursery, and preschool. Expenses are necessary if they meet the necessary expense test: health and welfare and/or production of income. Ensure that only a reasonable amount is allowed. Costs of child care can vary greatly. Don't allow unusually large child care expenses if more reasonable alternatives are available.
Court ordered payments. Alimony, child support (including orders made by a state administrative agency), and other court-ordered payments. If the expense is already being deducted directly from a taxpayer's pay, do not include it again as an expense.
Care of elderly, ill or disabled member of household. Actual expenses for care and support of an elderly, chronically ill, or disabled household member or member of the debtor's immediate family (including parents, grandparents, siblings, children, and grandchildren of the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case). [§707(b)(2)(A)(ii)(II)]
Chapter 13 Trustee's fee. If eligible for Chapter 13, up to 10% of plan payments for Trustee's fees. [§707(b)(2)(A)(ii)(II)]
Payment on Home, Vehicle and Other Property. Additional payments necessary to maintain debtor's primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor's dependents, that serves as collateral for secured debts; divided by 60. [§707(b)(2)(A)(iii)]
Financial Management Course required. In order to receive a discharge of debt in either Chapter 7 or Chapter 13, the debtor must complete a Financial Management Course. [§727( a)(11), §1328(g)]
Who gives the course? The Financial Management Course is to be given by non-profit budget and credit counseling agency approved United States trustee (or bankruptcy administrator, if any). The clerk of the Bankruptcy Court shall maintain a publicly available list of approved agencies and courses. [§111(a) & (b)]
Course description. The course must be given by trained, experienced personnel, and use "learning materials and teaching methodologies designed to assist debtors in understanding personal financial management." It is to be conducted at facilities situated in "reasonably convenient locations," or, if effective, by telephone or Internet. [§111(d)(1)]
Course cost. The agency may charge a reasonable fee for the course, but it must also provide services without regard to ability to pay the fee. [§111(d)(1)(E)]
The debtor has not received a discharge under Chapter 12 or 13 in a case commenced within 6 years before the filing of the petition in this case. This exception to discharge does not apply if at least 70% of all unsecured claims were paid in the Chapter 12 or 13 case. (If less than 100% of such claims are paid, plan must also been proposed in good faith and have been the debtor's best efforts.) [§727(a)(9)]
Debt incurred within 90 days before filing. Consumer debt for luxury goods or services incurred within 90 days before filing of the petition, and totaling more than $to a single creditor. [§727(b), §523(a)(2)(C)(i)(I)]
Cash advances within 70 days before filing. Cash advances obtained within 70 days before filing of the petition, and which total more than $from all creditors. [§727(b), §523(a)(2)(C)(i)(II)]
Educational loans. Educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit and other qualified educational loans are not discharged unless such exception from discharge would "impose an undue hardship on the debtor and the debtor's dependents." [§727(b)] [§523(a)(8)] [§523(d)]
Educational loan, benefit, or overpayment. [§1328(a)(2), §523(a)(8)]
Debt for death or personal injury caused by the debtor's operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance. [§1328(a)(2), §523(a)(9)]
Debt for restitution, or a criminal fine, included in a sentence on the debtor's conviction of a crime. [§1328(a)(3)]
This page was last revised: 08/06/05