Debtors do win in some cases!

[mlevesque308]

I came across this opnion filed in the RI BK court. I might want to find this attorney!

http://www.rib.uscourts.gov/sites/default/files/opinions/Cobb%20%2812-12848%29%20-%20Memorandum%20and%20Order.pdf

Just thought I would share.........

[IM2Stressed]

Not sure it is a "win", considering that the debtor could have easily paid the debt and not suffered having a bankruptcy.

[mlevesque308]

True, very true.

[forgotten]

Not sure it is a "win", considering that the debtor could have easily paid the debt and not suffered having a bankruptcy.

Without knowing all the facts surrounding the case you can not really say that for sure. The debtor could have been suffering 20-90% APR on the debt. There is an Indian lender running ads on TV offering $10,000 at around 90% APR. Paying back at 0% is way easier than 90%. As well, expenses on the CH13 form that show the dispossible income may not be the debtors true expenses, only the allowable expenses. Perhaps they had a payment on an airplane or other expensive non-necessary item that would not have been allowed but the debtor wanted to retain.

[kornellred]

In the Conclusion portion of the statement, Judge Finkle says that while "the Court" does not particularly like the outcome, the law is written such that debtors in this situation can in fact take advantage of it. There was simply no way that the trustee's objection to the plan could be sustained.

[catleg]

The unintended consequences of complex, poorly written legislation.
The win for the debtor comes when job loss results in a chapter 7 conversion.

[forgotten]

The unintended consequences of complex, poorly written legislation.
The win for the debtor comes when job loss results in a chapter 7 conversion.

True. Many times I pondered quitting my job for 3 months to file a CH7 instead (was worried about getting a new job however). Great when they reward people who quit their jobs and collect governement benefits instead of continuing to work. I could have quit my job for 3 months and saved $60k over 5 years.

[kornellred]

forgotten - good thing you didn't quit your job. If you quit your job with the specific intention of becoming eligible for Chapter 7, and the trustee found out about it, your petition would have been denied. That would be glaring, fraudulent abuse.

[catleg]

yes. if you do this, don't advertise the fact. there has to be an explanation. caring for a loved one, etc.

[forgotten]

forgotten - good thing you didn't quit your job. If you quit your job with the specific intention of becoming eligible for Chapter 7, and the trustee found out about it, your petition would have been denied. That would be glaring, fraudulent abuse.

Technically I am disabled. It would have been very easy to say it just got to be too much for me and the doctors would have backed me up. Could have gotten around any abuse objection. But I didn't, so its moot.