Bankruptcy Exemption Limits (what you can keep) Amounts Going Up
Bankruptcy Code § 104(b) provides that the exemption amounts and other dollar figures in the Code are automatically adjusted for inflation every three years. The adjustments are based on changes to the Consumer Price Index for All Urban Consumers published by the Department of Labor, rounded to the nearest $25.
New dollar amounts take effect on April 1, 2019, and will apply to all cases filed on or after that date. Consumer debtors who may benefit from the higher dollar amounts, particularly with respect to exemptions, the means test, and chapter 13 debt limitations, may wish to delay a bankruptcy filing until the new amounts take effect on April 1, 2019.
Despite popular belief, many lower-income bankruptcy filers can retain all or almost all of their assets in a chapter 7 bankruptcy. The new higher exemption limits means that it is even more likely that consumers can protect their assets in a chapter 7 filing.
New Exemption Amounts Protect More Consumer Property
Consumers in states that have not opted out of the federal exemptions may claim the bankruptcy exemptions under Bankruptcy Code § 522(d), as discussed in NCLC’s Consumer Bankruptcy Law and Practice § 10.2.1.1.
The federal bankruptcy exemptions may also be claimed if the “safe harbor” in Bankruptcy Code § 522(b)(3)(A) applies due to the consumer’s domicile for exemption purposes, even if the state in which the consumer’s domicile is located is otherwise an opt-out state, as discussed in id. § 10.2.1.2.
Exemption amounts refer not to the value of property, but to the consumer’s equity in the property after deducting outstanding credit secured by that property. The exemption amounts in Bankruptcy Code § 522(d) are doubled when a married couple files a joint case. 11 U.S.C. § 522(m).
For a state-by-state summary of state exemption amounts that apply to bankruptcies in certain states and that also protect property from seizure by judgment creditors, see NCLC’s Consumer Bankruptcy Law and Practice Appendix J. The same state-by-state survey is found in NCLC’s Collection Actions Appendix G.
As of April 1, the digital version of NCLC’s Consumer Bankruptcy Law and Practice will be updated throughout showing the new higher dollar amounts, both in the chapters and the Bankruptcy Code appendix (with footnotes showing the old dollar amounts). The following are the new exemption amounts:
Homestead - § 522(d)(1) $25,150
Motor Vehicle - § 522(d)(2) $ 4,000
Household Goods - § 522(d)(3) Per Item Limit $ 625
Aggregate Limit Household goods $13,400
Jewelry - § 522(d)(4) $ 1,700
Wild Card - § 522(d)(5) Any property $ 1,325
Wild Card Unused homestead § 522(d)(1) $12,575
Tools of the Trade - § 522(d)(6) $ 2,525
Unmatured Life Insurance - § 522(d)(8) $13,400
Personal Injury Claims - § 522(d)(11)(D) $25,150
Exemption for Retirement Accounts
As discussed in NCLC’s Consumer Bankruptcy Law and Practice § 10.2.3.3, the federal bankruptcy exemption for retirement funds in pension plans and individual retirement accounts is available to all debtors, even those in “opt-out” states who would not otherwise be permitted to claim the federal exemptions. 11 U.S.C. § 522(d)(12) and § 522(b)(3)(C). The maximum dollar amount for this exemption also adjusts every three years. 11 U.S.C. § 522(n). The new maximum aggregate value of funds in retirement accounts that may be exempted will be $1,362,800.
Other Dollar Amount Adjustments in the Code
The inflation adjustment also applies to other dollar amounts in the Code, including:
- • Priority for wages and employee benefits under Bankruptcy Code § 507(a)(4) will now be $13,650, and the priority for consumer deposits under Bankruptcy Code § 507(a)(7) will be $3,025. Distribution to priority creditors is discussed in NCLC’s Consumer Bankruptcy Law and Practice § 3.5.4 and § 18.5.5.
- • Debt limits for eligibility for chapter 13 under Bankruptcy Code § 109(e) will also go up—to $419,275 in unsecured debt and to $1,257,850 in secured debt. The chapter 13 debt limitations are discussed at id. § 18.104.22.168.
- • Threshold for the presumption of nondischargeability under Bankruptcy Code § 523(a)(2)(C) for purchases of luxury goods or services incurred within 90 days prior to filing will be $725 and for cash advances within 70 days prior to filing will be $1,000. A discussion of when these presumptions arise can be found at id. § 22.214.171.124.3.2.
- • Dollar amounts under the means test for determining whether a presumption of abuse exists, based on the debtor’s income after expenses over a 60-month period, will now be: (i) $8,175 ($136.25 per month based on 60 period) or 25% of nonpriority unsecured debt, whichever is greater, or (ii) $13,650 ($227.50 per month). 11 U.S.C. § 707(b)(2)(A)(i). These dollar amounts are discussed at id. § 126.96.36.199.
- • The cap on homestead property acquired within 1215 days before the bankruptcy filing under Bankruptcy Code § 522(p) or based on the commission of certain bad acts by the debtor under Bankruptcy Code § 522 (q) will be $170,350. These limitations on state homestead exemptions are discussed at id. § 10.2.3.4.
- • The minimum aggregate amount of property that a trustee may seek to recover as preference in a case filed by a debtor whose debts are primarily consumer debts will now be $6,825. 11 U.S.C. § 547(c)(9). This limitation on a trustee’s ability to avoid transfers as a preference is discussed at id. § 10.4.2.6.4.2.
- • The amount in an education IRA, a section 529 tuition savings program, and a qualified ABLE account that is excluded from property of the estate, if placed in such an account between 365 and 720 days before the petition was filed, will now be $6,825. 11 U.S.C. §§ 541(b)(5)(C), 541(b)(6)(C), 541(b)(10)(C). This exclusion from the bankruptcy estate is discussed at id. § 2.5.3.
Ohio consumer attorney ensures that, even if the Trump Administration hides huge consumer complaints database, you can still access it
Mick Mulvaney is the Darth Vader of the Trump Administration when it comes to hating real people and worshiping at the feet of his Emperors, the corporate masters who own him. Mulvaney hates the very idea of a Consumer Financial Protection Bureau that a bought and sold Congress cannot neuter because it is funded independently like the Federal Reserve and EVERY OTHER financial agency.
Mulvaney wants to make CFPB like the FCC and FTC and all the other agencies that have been totally neutered and rendered impotent by a Congress in hock to campaign contributors who crack the whip and watch their minions jump.
A consumer attorney in Ohio isn't having any of this, and has put the entire CFPB consumer complaints database online outside the CFPB's control, and promises to keep it updated -- so even as Mulvaney tries to hide the complaints, this new database will ensure that real people will be able to access it.
DannLaw launches "Scoundrels, Scams and Cheats" database to ensure public access to CFPB consumer complaint reports
The National Association of Consumer Advocates (NACA) offers consumers a great free tool to download and review before shopping for a motor vehicle. You can access the app on your desktop or laptop by going to www.USLemonLawLawyers.com. Or take it with you to the dealer's by downloading it from the Apple App Store or the Google Play Store (Android).
From The Oregonian:
The settlement, announced in February, sets aside $1.5 billion for direct payments to about 2 million borrowers nationwide whose homes were foreclosed between 2008 and 2011 by one of five participating mortgage servicers: Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.
But nearly 10,000 Oregon residents haven't filed claims since notices were sent out in September. The deadline for claims is Jan. 18.
In Oregon, payments would be at least $840, though it depends on the number of claims. Claims can be filed by returning the forms mailed in September, or at nationalmortgagesettlement.com.
The Oregon Court of Appeals has ruled that the hydra known as MERS -- the monstrous placeholding dummy with a million phony vice-presidents, which the mortgage servicing industry created to attempt to evade the requirement (and the fees) that all transfers of interests in mortgages be recorded -- cannot use the streamlined, fast-track nonjudicial foreclosure process in Oregon!
Niday v. GMAC Mortgage, LLC et al,
"[T]he import of our holding is this: A beneficiary that uses MERS to avoid publicly recording assignments of a trust deed cannot avail itself of a nonjudicial foreclosure process that requires that very thing-- publicly recorded assignments."
The nonjudicial foreclosure process was created in the old days when lenders held onto their mortgage loans, which were actually underwritten thoughtfully. Fast forward to the slice-and-dice fast-money 1990s-2000s, when the banksters and money men started financializing everything and you suddenly had a tool that was being used against homeowners in ways never intended, by an entity never imagined by the law, a weird hybrid creature that pretended to be both the beneficiary of the loan (when useful to MERS) and not the beneficiary (again, when useful to MERS).
Hurrah for the Oregon Court of Appeals. BULLSEYE! Seems likely the MERS scammers will appeal but, for now, a true shining example of Oregon flying with her own wings and reaching the right conclusion despite a number of other states having missed the mark widely on this issue.
Filing Consumer Complaints for Mortgage Problems, Auto Fraud and More
Keep this list handy so you’ll know who to turn to when it comes time to register a complaint related to a shoddy consumer product or practice.
Note that some agencies offer direct assistance to resolve complaints while others track information for use by law enforcement officials. Also, for all online complaints registered with the CFPB, the bureau will forward your client’s complaint to the company, issue a tracking number, and keep you or you updated regarding the status.
Auto Loans or Other Consumer Loan Complaints (other than mortgage and student loan problems)
Consumer Financial Protection Bureau (CFPB)
Auto Dealer Complaints FTC Complaint Assistant
Bank Account or Bank-Related Service Complaints
Consumer Financial Protection Bureau (CFPB)
Credit Card Complaints
Consumer Financial Protection Bureau (CFPB)
Consumer Financial Protection Bureau (CFPB)
Other Consumer Fraud & Scams
_ I have been working for months now on a project that has the potential to provide ample, sustainable, non-general-revenue funding for legal aid services so desperately needed by ordinary folks in Oregon these days, as Oregon and the feds keep cutting their support, and more and more people are ground up by the legal system simply because there is nowhere for them to turn. Imagine if the $13 BILLION that the big banks made reinvesting money lent to them at near-zero interest by the Feds had gone to support legal aid services.
(That's right, banks got huge piles of free money from the Feds at the Federal Reserve discount windows and then turned around and LENT that same money back to the federal government at interest, using the profits to pay bonuses that already exceed the pre-crash-year bonuses of 2007 and 2008. Whoever said there is no free lunch meant "for real people" -- because the banks sure as hell have enjoyed a lavish free endless banquet at our expense.)
Stay tuned here this year, I hope to have good news on this front in 2012. Meanwhile, a good essay by a top consumer lawyer.
Equal Justice under the Law
An Essay by O. Max Gardner III
Training without travel for mid-valley nonprofit leaders!
Friday Fundamentals for Flourishing Nonprofits
Eight carefully designed, targeted 90-minute workshops, with attendance limited to eight nonprofit leaders, so you will get the personal attention to the questions that matter to you and your nonprofit. Training that gets right to the point, right here in Salem, created and presented by an attorney focused on helping nonprofits do more good while having more fun.
“First things first? So how do we know what’s first?”
(Priority-setting for nonprofit leaders)
File, forget, and flounder.
(Using minutes to help make better use of your hours.)
By law or not by law?
(Bylaws for the bewildered.)
“Procedures? We don’ need no stinking procedures!”
(How and why nonprofits can learn to love doing things “by the book.”)
What taxes? I thought we were a nonprofit!
(“Excuse me, your unrelated business income is showing.”)
“We do the Lord’s work, so why do they act like Satan?”
(Conflict on boards.)
“We love mankind. It’s the employees who drive us mad.”
(Employment law for nonprofits.)
“But Judge, . . . !”
(How to raise funds without having a lawyer on speed-dial.)
Each workshop will be at 11 am on Fridays in downtown Salem.
Tuition is just $35 for each one (paid in advance)
or $40 (paid day of) – or guarantee your seat by enrolling for all eight for just $250 (save $30).
Workshop creator and leader is John Gear of the John Gear Law Office, LLC.
See http://JohnGearLaw.com for more information.
To enroll or for questions, call John at 503-339-7787.
For those trying to understand or navigate the state court system on their own. (H/t to Oregon Legal Research blog.)
One thing though: If you're trying to research the Oregon Revised Statutes, OregonLaws.org is a lot better format that is a lot easier to use.
One other thing: It's the cheap person who usually winds up spending the most. Some of the most expensive cases I saw when I worked at an appellate court were started by people who tried to save a couple hundred bucks in attorney fees and wound up having to litigate for years. There are definitely a few things you can do for yourself in the legal system but, as a general rule, it's not a system set up to support self-helpers. Grab your favorite piece of "legal" software and read the fine print -- the first thing it says is that it is not intended to replace qualified legal counsel. Of course that's utter BS; nobody would buy the software if it wasn't sold as the solution to your legal problems at big savings. But it's an important point to remember -- if a licensed attorney screws up your matter, there's a bar association Client Assistance Office and a bar complaint process ready to help you. The software companies refer all their consumer complaints to Helen Waite, as in "Go to . . . . " Just sayin'.
John Gear is a Salem attorney in solo practice