Case Problem Analysis: Liquidation Proceedings Lee Park was an executive for a large corporation. His base salary, which was calculated on a formula tied to the company income. averaged $338,500 over a five-year period. Because of a recent divorce (within the last year). Lee owed his ex-wife $4,350 per month in spousal support. Lee owed back taxes to the IRS of $210.000, which required him to pay $2,800 per month in addition to current tax payments. Lee owed $150,000 in student loan debt. As a result of his divorce, Lee became the sole owner of his home, which was worth $900,000 and had a $600.000 mortgage on it with Bank of the US. Identifying the Facts and Issues In this case, Lee Park (the debtor) filed a Chapter select answer bankruptcy. Under this type of bankruptcy, the debtor is required to file a list of secured and unsecured creditors as well as several other lists, known as select answer Lee's payments to his wife generally be dischargeable in bankruptcy. Student loans generally dischargeable in bankruptcy. select answer select answer â¾ Under the federal exemptions, Lee normally select answer be allowed some portion of equity in his home. Because Lee select answer - become the sole owner of the house (with - have a federal responsibility for the mortgage) within the last three years, Lee select answer maximum equity exemption. According to the federal limit in the book, Lee select answer able to claim a homestead exemption for the full amount of the equity in his home. could pay any of his select answer select answer be If the median income in Lee's state for a single person was $47,000, there select answer presumption of bankruptcy abuse by Lee. If Lee had to complete the means test, the Court would deduct select answer expenses from his monthly disposable income to decide whether Lee debt. In this situation, given Lee's income, it likely that he would have his case dismissed or converted to a Chapter 13. What If the Facts Were Different? Assume that Lee Park was not an executive but instead was a line worker making $41,000 per year. His spousal support was $1,000 per month and his home was worth $365,000 with a $290,000 mortgage. He did not have student loans and did not owe any back taxes. The state median income was still $47.000. In this case, Lee's income select answer select answer higher than the state median. Because of this, there a presumption of bankruptcy abuse. Lee's equity in his house would be select answer . select answer amount of equity in his home. lower than the federal limit. Lee . This amount of equity select answer â¼ receive the entire
