We’ve talked a lot about fraud and bankruptcy and how it could jeopardize a debtor’s bankruptcy case; but some debtors have taken their fraud attempts one step further.  In a suburb of Pittsburgh, Pa, a debtor desperate to keep the electricity on her home, forged a bankruptcy notice and sent it to the electric company.

The details of the case:

D. Hunt, was facing a $1,500 electricity bill and cut-off notice.  In an attempt to deceive Duquesne Light Co. and avoid an electricity disconnection, Hunt forged a bankruptcy notice to the company and was convicted of counterfeiting a seal of the court of the United States.  She received two years probation.

She’s lucky she didn’t get jail time. Forgery is serious business and forging a bankruptcy notice in an effort to manipulate a creditor is dangerous, unnecessary and foolish. If a debtor is facing debts, foreclosure, lawsuits or a disconnection of utility service, a bankruptcy attorney can submit an emergency bankruptcy filing with the court.  This emergency bankruptcy filing can stop all adverse creditor behavior and stop utility disconnection, lawsuits, wage garnishments , foreclosures and other creditor collection actions. Please do not make the mistake Ms. Hunt made by forging bankruptcy notices. Not only can such illegal behavior land you in jail, it might also jeopardize any future bankruptcy filing.

(Consumer Bankruptcy News, Volume 19, Issue 18, page 2)

Bankruptcy Court May Consider Projected Disposable Income

In the Chapter 13 bankruptcy case of  Nowlin v. Peake (In re Nowlin), No. 08-20066 (5th Cir. 07/17/09), the 5th U.S. Circuit Court Of Appeals ruled that the bankruptcy court could consider projected disposable income when confirming or denying confirmation of debtor’s Chapter 13 repayment plan who has above-median income.

The details of the bankruptcy case:

“The above-median income Chapter 13 debtor’s monthly deductions included $1,134.79 to repay a 401(k) loan. Ac­cording to Form 22C, the debtor had monthly disposable income of $38.67. The debtor proposed a 60-month plan with monthly payments of $195. Payments to unsecured creditors totaled $980.45. The Chapter 13 trustee objected to confirmation on the basis that the debtor was not committing all of her projected disposable income to plan payments. The trustee pointed out that the debtor’s 401(k) loan would be repaid within two years enabling the debtor to make substantially greater payments into her plan.”

Based on this “projected disposable income” rule, the bankruptcy court also noted that the debtor could plausibly pay an extra $947.30 to her Chapter 13 bankruptcy plan payments once she repaid her 401(k) loan in full.  The debtor objected to the use of “projected disposable income” but the bankruptcy court said that it was valid because it was based on events that could reasonably happen over the life of the Chapter 13 bankruptcy plan.

The bankruptcy court said:

“We agree with the bankruptcy court that future events must be reasonably certain or else the task of projecting disposable income may stray too far from the statutorily defined starting point. ‘Projecting’ is not speculating, and must be based on known facts. Future events need not, however, be absolutely certain. We can predict very few fu­ture events with absolute certainty…”