|
 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Debtors' and Creditors' Rights Take home examination Assume that the date is now November 8, 1995 and that you elicited the information on the following pages from, your clients, Mr. and Mrs. Debtor, in an interview conducted yesterday afternoon. Analyze this information and prepare a memorandum describing your analysis of what might happen to them if they do nothing, what practical steps they might consider to help themselves, what rights they would have under state law, and how Chapter 7 and Chapter 13 might address their financial difficulties. Your analysis should include a discussion of advantages and disadvantages of particular solutions. Recognize that no one solution may be "perfect" and that a solution might combine different approaches over time. Prepare your memorandum on the basis of materials assigned for reading and discussed in class. No research is required and reference to outside research will not be given any additional credit. I think you can do an excellent job in 10 pages double spaced typing, or less. I will not read beyond 15 pages double spaced typing. General personal data Your clients reside in Santa Cruz with their son Brandon, age 2. They very much desire another child and have been trying unsuccessfully to conceive another child for the past several months. Because of Mrs. Debtor's age, they have been advised by her doctor that it would be best to have another child within the next two years. Several months ago, Mr. Debtor left a long time position with a governmental agency to start his own private practice as a psychologist in San Jose. He currently sees approximately 10 clients each week, but he projects that his current caseload will grow and that his current net income of $2,500/month (i.e. after business expenses, including medical insurance premiums, and taxes) will double within 3-5 years. Mrs. Debtor teaches morning kindergarten in Monterey. She is under contract for the 1995-96 school year and is optimistic but not assured that her contract will be renewed for 1996-97. Her disposable income, as that phrase is defined in the federal wage garnishment statute, is $12,000/year (paid over 12 months though she works only 9 months). She takes home $225.00 less per month than her disposable income because her paycheck is subject to voluntary withholding of $225.00/mo. to repay a loan obtained from the school district credit union. The loan is cosigned by the principal of her school. Because of lower enrollments last year, Mrs. Debtor did not receive a teaching contract for 1994-95. She did not seek other employment because she wanted to stay home with her baby. During that time, your clients lived from Mr. Debtor's income and from money advanced by Mr. Debtor's brother, incurred much new debt, and fell behind on payments for debt previously incurred. For the past several months, creditors have been dunning your clients. Liabilities
Assets
Monthly Expenses (not including debt service noted above)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||