Inflation Adjustment for Family of Two Goes the Wrong Way

Posted by Robert Weed / in Weekly Posts /

Bankruptcy Means Test Inflation Adjustment for Family of Two Goes the Wrong Way

Budgeting food and clothes in the bankruptcy court for a family of two just got harder.

According to the Justice Department (who gets them from the IRS, who gets them from the Bureau of Labor Statistics), the average cost of food, clothing and miscellaneous is lower for a family of two than it was a year ago.  And, that makes no sense at all, but there it is.  

Here’s the Means Test National Standards

National Standards cover five necessary expenses: food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous.                 

                  Family Size      May 2023      May 2022    Change  

                  Family of 1        $841               $785          $+56         

                  Family of 2       $1389             $1410         $-21

                  Family of 3       $1700             $1610         $+90

                  Family of 4       $1993             $1900         $+93

 

Date of these adjustments

These adjustments for the bankruptcy means test are posted usually April 1 and then reposted May 15.  But, it was today, May 15, 2023 that I first noticed the adjustment for a family of two went the wrong way.

Bankruptcy Trustee Hearings Will Soon Be on Zoom

Posted by Robert Weed / in Blog, Virginia Bankruptcy, Weekly Posts /

Bankruptcy Court Trustee Hearings Will Soon Be On Zoom

Bankruptcy Trustee hearings are now telephonic. That started for the pandemic, effective April 9, 2020. They are moving to Zoom, soon.

Associate Attorney General Vanita Gupta made that announcement Friday at the annual convention of the National Association of Consumer Bankruptcy Attorneys.  Colorado, Wyoming, and Utah switched at the first of this year.  Ohio, Michigan and Hawaii are next.  We hope Virginia will be in the next expansion.  

Zoom Hearings Should Work Better for Everyone

Before the pandemic, people in bankruptcy often lost a day from work for their three-or-four minute bankruptcy trustee hearings. In some parts of the country people had to travel hundreds of miles to the nearest Federal Court House. Here, you could spend hours in traffic trying to get to Old Town Alexandria during the morning rush.

Doing the hearings by telephone conference call avoided that travel time; but phone hearings could often be noisy and hard to follow who was talking. Zoom should work a lot better.

Why Do We Have These Hearings?

By law, people who file bankruptcy“appear” in front of the bankruptcy trustee to answer questions.  (For most people, the questions are, “Did you go over these papers when you signed them, and is everything you put there true?”) Those hearings are called “Meeting of Creditors” although creditors rarely show up. By law are between four and six weeks after we send your papers to the court. The Alexandria bankruptcy court schedules forteen an hour. So that’s four minutes or so per case.  

Paying Your Mortgage with Money Order is a Bad Idea

Posted by Robert Weed / in After Bankruptcy, Blog, Chapter 13, Weekly Posts /

Paying Your Mortgage with Money Orders is a Bad Idea

Handing somebody a money order to buy a car or something–that’s sometimes safer than cash.  But mailing a money order to pay your mortgage–that’s almost always a bad idea.

Let me tell you about Norman.  Norman filed Chapter 13 bankruptcy with different lawyer.  He later came to see me in a panic. Selene, his mortgage company, has started to foreclose. “So have you paid on time for the fifteen month since the bankruptcy was over?” I asked.  “Absolutely,” he replied.  That was Friday.  Sunday afternoon, he sent proof.  Eleven cancelled checks and four sets of Western Union money orders.

We need to move quickly to stop that foreclosure but I don’t really have proof he made the payments. The cancelled checks–they show Selene got them.  But the money orders; who knows where they actually went.

Getting Proof from Western Union

We are sure glad Norman kept his receipts.  Western Union money orders have form on the back he can mail in–with $15.00–to track if the money orders were cashed.  And by whom.  That will be a total of $240 to track sixteen money orders.  (Western Union money orders are limited to $500; so Norman needed four money orders for each mortgage payment.)

If they haven’t been cashed, he can get his money back. If Selene cashed them, we can prove the mortgage is current. Meanwhile, the clock is ticking toward foreclosure.  Because Virginia foreclosure law was changed a few years ago, we do have enough time to work with. But no time to spare. 

Selene Violates Regulation Z and Makes This Problem Worse

When Norman filed for Chapter 13 bankruptcy, Selene stopped sending monthly to him. As far as I can tell, that’s their national policy. (I’m suing Selene because of that.) Regulation Z requires mortgage companies to send periodic statements. And expressly says that bankruptcy is NOT an excuse to stop sending statements.

If Selene had sent monthly statements, Norman could have seen right away if the money orders weren’t being properly credited.  When the case was over and Selene started sending statements, Norman couldn’t figure out what was going on.  We went to the Selene website to download the past monthly statements.  But they would only give us six months of past statements.