I’m always delighted when I uncover another aspect of the bankruptcy “reform” act of 2005 that operates in my client’s favor. We all know that the law was written to skewer the consumer debtor who was painted as irresponsible and profligate, a picture absolutely at odds with the world as I’ve seen it in 46 years of bankruptcy practice.
Yesterday’s discovery was how the law treats broken families better than intact families. My client is a single woman with a teenage child for whom she receives substantial and regular support. (Thank you, Dad). In preparing the Chapter 13 version of the means test expenses to determine what Mom will have to pay to unsecured creditors, one includes the child support she receives in income; takes the deductions based on a household of two; then subtracts the support from the final number!
End result: Mom, my client, gets to figure her expenses including the cost of housing, feeding, and educating her daughter, but then gets to back out of the equation the support she gets for the child. In this case, it made a $1000/month difference, a $1000 less per month that she must pay to creditors.
I wonder if the cock-sure Congressmen who wrote and passed this bill realized that the “new” law treats divided families better than the traditional, intact family. In the meantime, I will take every advantage I can find in this wretched law where it benefits my clients.
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