TABLE
OF CONTENTS
This
outline is subject to change:
I.
Lien Avoiding Powers of Debtor
a.
Explanation of Code Section §522
i.
Expanded Powers of §522 under BACPA
ii.
§101(54) Definition of "Transfer" that
impairs an exemption
1.
Debtor Exemptions Rights
a.
Full or partial Interest in
property
b.
Equity or no equity in the
property
2.
When is the debtors claim of an exemption
right to property finalized?
a.
Case law holdings barring a debtor to
objection to an exemption right unless
the creditor objected within 30 days of
the creditors meeting. Bankruptcy Rule
4003
b.
In contrast case law holdings that in a
§522(f) action creditor is not
barred from raising exemption or
valuation issue after 30 deadline has
run under Rule 4003.
b.
Debtor Right to Lien Avoidance under
§522(f)
i.
Actions to Avoid Lien are performed by motion
as prescribed by Bankruptcy Rule
4003(d).
ii.
Avoidance of a Judicial Lien
§522(f)(1)(A)
1.
Extent and Definition of a Judicial Lien
defined
a.
Discussion of the effect of liens
granted in a divorce proceeding
2.
Effect on Creditor and Creditors rights
after a Lien is avoided
3.
Limitations on power to avoid Judicial
Lien
a.
What is outcome when there is a portion
of the property that is
non-exempt?
b.
What came first the debtor's interest
in the property or the lien and what
happens under each scenario?
c.
§522(f)(1)(A) limitation on
ability to avoid liens that are in the
nature of alimony, maintenance, or
support.
iii.
Debtor Right to Avoid Non-purchase Money
Security Interests under
§522(f)(1)(B)
1.
Explanation of the difference between a
PMSI and non-PMSI: With a PMSI, the debtor
buys the collateral with the funds from
the secured creditor. With a non-PMSI, the
debtor already owns the collateral.
2.
Definition of what is and is not household
goods
3.
Limitation imposed by
§522(f)(3)
4.
Discussion of case law issues related to
Tools of the Trade under
§522(f)(1)(B)(ii)
c.
Debtor Right to Avoid Transfers and Claim
property as exempt under §522(g)
i.
Voluntary versus non-voluntary
transfers
ii.
Discussion of §522(g)(2)
d.
Debtor's Right to Step into the Shoes of the
Trustee and avoid liens that the trustee has the
authority to avoid but elects not to as
prescribed under §522(h)
i.
Voluntary versus non-voluntary
transfers
ii.
Application of powers under §522(h) and
limitations
iii.
Examples
iv.
Debtor's ability to avoid mechanics liens and
repairmen's liens under
§544(a)
v.
Debtor's ability to set aside preference
under §547 for:
1.
Tax refund garnishments by state and
governmental agencies
2.
Payments made to collection
agencies
vi.
Debtor's ability to avoid post petition
transfers under §549
II.
Trustee's Lien Avoidance Powers
a. The
Strong Arm Clause §544
i.
Explanation of the 3 types of transfers that
are voidable by the trustee under
§544(a)
ii.
Perfected versus non-perfected security
interest as defined under the UCC and ability
of the Trustee to avoid a lien.
iii.
§544(b) and Fraudulent Conveyances under
State Law
b.
Statutory Lien Avoidance under
§545
i.
Definition and explanation of code
section
ii.
Effect with various tax liens
c.
Trustee's ability to avoid liens as a
preferences under §547
i.
Definition and examples of when the avoidance
power may be used
ii.
Limitation of avoidance powers as outlined in
§547(c)
d.
Trustee's ability to avoid fraudulent transfers
under §548
i.
Definition and conditions of trustee power
under this code section
e.
Trustee's power to avoid post-petition transfers
under §549
i.
Examples of post petition transfers that can
be avoided
ii.
Limitation on avoidance including
1.
Lack of notice to creditor of bankruptcy
filing
2.
Transfer made by a debtor involved in an
involuntary bankruptcy filing
f.
Trustee's power to avoid Liens securing fines,
penalties and forfeitures under
§724(a)
i.
Application only to Chapter 7 cases not
Chapter 13 cases
ii.
Definition of when the power becomes
effective
iii.
Application with respect to tax
liens
III.
Lien Stripping of Second Mortgage in Chapter
13
a. Legal
Basis for Lien Stripping under the Federal
Bankruptcy Code
i.
Relevant Bankruptcy Code Sections
1.
§506(a)
2.
§506(d)
3.
§1322(b)(2)
ii.
Determining First and Second Lien Priority
and Eligibility for Lien Stripping
iii.
Distinction based on whether it is the
debtor's principal residence or
not
iv.
Proper way to determine value of the proper
and whether there is any equity in the
property and how much is too much
b.
Pre-Filing Consideration
i.
Client Counseling
1.
Chapter 13 Eligibility
2.
Feasibility Considerations
ii.
Due Diligence Research
1.
Property Valuation Considerations
iii.
Debt Limits
1.
Ethics and Application of Chapter 20
approach
iv.
Schedule Preparation in Chapter 13
1.
Do's and Don'ts for how to schedule
creditor in chapter 13 plan
2.
Suggested Disclaimer and
implications/consequences for
omission
c.
Drafting the Complaint
i.
Motion versus Adversary
1.
Pros and Cons discussed
2.
Procedural Difference
ii.
Identifying the Parties to Serve /
Sue
1.
What parties need to be joined as parties
to Adversary or Motion and what parties
must be served
2.
How to research and list all
parties
a.
Application of FRCP 19 regarding
joinder
b.
Application of Bankruptcy Rule
7109
3.
Service of Process
a.
Applicable Bankruptcy Rules
i.
Bankruptcy Rule 7004(h)
ii.
Bankruptcy Rule
7004(b)(3)
b.
Best Practice Tips
i.
To Name officer or not to Name
Officer
ii.
Serve P.O. Box Yes or No?
iii.
Is service to attorney who filed
notice of appearance on behalf of
creditor sufficient?
iv.
Tips to include in Certificate of
Service to limit
liability
iii.
Introducing Evidence
1.
What does it take to make your
case?
2.
Stipulation
3.
Common Objection by Creditors and Practice
Tips for preventing reversal of a
successful decision on appeal
iv.
Motion for Summary Judgment
1.
How do you make the case?
v.
Trial
1.
Practice Tips
vi.
Final Judgment / Resolution
IV.
Appendix (Sample Documents)
a.
Debtor's Rights to Avoid Liens (Sample
Documents)
i.
Motion to Avoid Judicial Lien
1.
Order on Motion to Avoid Judicial
Lien
ii.
Motion to Avoid Non-Purchase Money Security
Interest
1.
Order on Motion to Avoid Non- Purchase
Money Security Interest
b.
Trustee's Lien Avoidance Powers
i.
Sample Pleadings filed by debtor under
§522(h) stepping into the shoes of the
trustee (I need to do some further research
but I will come up with a few sample
pleadings under this heading
c.
Lien Stripping of Second Mortgage in Chapter
13
i.
Complaint to Determine the Nature, Extent and
Validity of Lien and to Disallow Secured
Claim
1.
Sample Order
ii.
Motion For Valuation of Debtor's Residence
and Avoidance of Junior Trust Deed
Thereon
1.
Sample Order
iii.
Retainer Letter Agreement with Client
regarding Potential Striping of Second
Mortgage Lient
iv.
Sample Resolution Letter to Client
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ABOUT
THE AUTHOR
WELDON
REED ALLMAND
Mr. Reed is a
Dallas, Texas consumer bankruptcy attorney whose
firm is the largest filer in Northern District -
Dallas Division, and Eastern District - Sherman
Division. Mr. Allmand is scheduled to address the
NACBA convention in Chicago this year.
W. Reed Allmand is
a Board Certified Consumer Bankruptcy Attorney and
partner in the law firm Allmand & Lee. He has
been practicing for 7 years and has handled more
than 3,000 bankruptcy filings. He is also author of
the book, "The Truth about Bankruptcy." For the
past several months, Allmand & Lee has filed
over 200 bankruptcies per month. Allmand & Lee
has offices in Dallas and Hurst.
ABOUT THE
CONSULTING EDITOR
Carl R.
Gustafson
Carl R. Gustafson
graduated with honors from the University of
California, Berkeley School of Law in 2007. In
2005, he was a legal intern for Global Justice in
Rio de Janeiro, Brazil where he drafted sections of
human rights situation reports and submitted them
to the United Nations and other international
bodies. Additionally, he researched issues of
international jurisdiction and enforcement of
international treaties.
Gustafson opened
the Lincoln Law California offices in Pleasant
Hill, California and focuses his practice exclusi
vely on bankruptcy law in the East Bay. The firm
now has offices located in Utah as well as
California. Mr. Gustafson is a member of the
National Association of Consumer Bankruptcy
Attorneys, the American Consumer Bankruptcy
College, the King Bankruptcy Academy, and the
Alameda Count Bar Association Bankruptcy Section.
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