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Arthur W. Rummler
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Articles in Publication by Arthur W. Rummler
"Discharge of Divorce Debts in Bankruptcy: The Timing of a Bankruptcy Petition - Before or After the Dissolution?"
By Arthur W. Rummler
Questions abound as to bankruptcy as it relates to divorce. Most often, the questions involve whether a certain debt would be dischargeable by a client or the spouse. Lately, the questions surround the timing of filing a bankruptcy petition, and the all important question of whether attorney fees can be discharged in bankruptcy. It seems that, for better or for worse, divorce and bankruptcy will be intertwined for eternity. Media reports confirm that divorce is actually the second leading cause of excessive debt accumulation.1
As such, divorce often leads to bankruptcy.
The Bankruptcy Code 2 has several specific provisions that relate to family law and divorce issues. As with all things related to bankruptcy since the watershed year of 2005, the past laws were significantly affected by the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"). These broad changes expanded the law in some very important ways. This article focuses on the dischargeability of various divorce related debts in bankruptcy, including attorney fees, as well as the timing of filing a petition in bankruptcy for divorcing (or divorced) couples.
Understanding the Bankruptcy Discharge
The primary goal for most bankruptcy cases is the discharge of debt. The process begins when a debtor files a bankruptcy petition and fully discloses all assets and liabilities. Additionally, the debtor provides disclosure of certain financial information such as transfers of property, history and sources of income, lawsuits involving the debtor, and all other pertinent information that assists creditors and the bankruptcy trustee in analyzing the case. In exchange for compliance, and absent any other issues, a debtor typically receives a discharge of debts.
However, certain debts are not dischargeable under the Bankruptcy Code. With respect to divorce related debt, there are two specific provisions that apply. Under 11 U.S.C. Section 523(a)(5) certain "support" debts (payments) are non-dischargeable. Broader in scope and more comprehensive, 11 U.S.C., Section 523(a)(15) applies to debts incurred through the course of a divorce case.
Discharge of "Support" Payments
Simplicity is not often synonymous with the Bankruptcy Code. However, 11 U.S.C. Section 523(a)(5) perhaps is an exception. The section provides in pertinent part, that:
NOTE: This is just an excerpt of the entire article. Follow this link: http://www.dcba.org/mpage/vol221209art3 to read the rest of the article. ______________________________________________________________
"The Growing Trend of Women Filing Bankruptcy and
the Effect of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005"
By Arthur W. Rummler
This article addresses two issues: first is the growing trend of women filing individual bankruptcy cases and a review of possible contributing factors. Second is a summary of some of the changes that women (and to a lesser extent men, see infra) can expect as a result of the not so recent amendments to bankruptcy law.
As you may have heard, the Bankruptcy Code1 was revamped in 2005 with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. With a name like that, it's no wonder that everyone refers to the amendment as "BAPCPA" (pronounced bap-see-puh). While the Bankruptcy Code aims to treat men and women the same, it would appear that certain sections affect women differently both generally and specifically.
Additionally, there is a growing trend towards higher bankruptcy rates among women. While the exact causes are not certain, there are enough commonalities that commentators have reduced the reasons to perceived core causes.
The higher rates of bankruptcy combined with the changes from BAPCPA present a challenge for women and the attorneys who represent them. But before exploring the specifics, let's take a brief journey through the history of bankruptcy laws.
2. Short History of Bankruptcy Laws
"Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry."
(Hamlet, Act I, Scene 3, William Shakespeare.)
NOTE: This is just an excerpt of the entire article. Follow this link: http://www.dcba.org/mpage/vol200708art2 to read the rest of the article (which is located about halfway down the page).
"Caution! Failing Business Ahead!! Knowing When to Pull the Plug on a Failing Business Can Protect Your Client’s Hard Earned Wealth"
By Arthur W. Rummler
It’s late Friday afternoon and your mind is wandering. For the moment, the trials and tribulations of your past week and the challenges of the week ahead have faded away. Perhaps you’re dreaming of a day on the golf course, a weekend shopping downtown or simply quality time with family and friends. Then the phone rings.
It’s I.M. Wealthy on the line, a long-time client. In the past you’ve handled his corporate matters, real estate transactions and estate planning. Your partner even handled his divorce. Reflexively your mind snaps back into lawyer mode. This time there are no customary salutations and niceties. Wealthy cuts right to the chase.
He relates a sad tale told too often in our current economy. His once formidable business is sick and fading fast. How can this be? Wealthy has…or had….a great business. He had lots of clients, sold millions of widgets and made a fortune. Now he’s nearly broke and worse, he’s pledged all his personal assets to cover his failing business. Creditors are nipping at his heels and he can’t see any solution. He’s come to you to sort it out.
You listen carefully to his sordid tale of declining sales, market fluctuations, a risky takeover and intense competition from overseas. For the last two years he’s poured every cent of his savings into the company. He’s even mortgaged every asset he owned just to keep the doors open. And it still wasn’t enough. The business continued to spiral downward. Now Wealthy is facing lawsuits, judgments, citations and IRS levies. He is effectively out of business.
The unfortunate scenario of I.M. Wealthy is common today, but it is also avoidable. While economic changes happen quickly, leaving even well-heeled businesses in permanent trouble, there are usually some distinct warning signs. By heeding the signals of impending business failure, business owners can manage the outcome to their advantage.
Title 11 of the United States Code (the "Bankruptcy Code") provides at least three possible solutions to business problems: Chapter 11, Chapter 7 and Chapter 13. More solutions exist outside of bankruptcy court, such as out of court workouts, asset or business sales, and assignments for the benefit of creditors. However, the first step to recovery or a soft landing is to identify and heed the common warning signs.Warning Signs that Your Client’s Business is in Trouble: The signs of a failing business can take many shapes. While not exhaustive, the list below can be a starting point for an honest assessment of future business prospects.
NOTE: This is just an excerpt of the entire article. Follow this link: http://www.dcba.org/mpage/vol211208art4 to read the rest of the article.