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September 2019 Archives

Bankruptcy court rejects medical marijuana expenses

People who use medical marijuana in Texas may run into problems in bankruptcy court when it comes time to set up a court-ordered repayment plan. Businesses in the marijuana industry have had trouble seeking bankruptcy protection, even in fully legal states, due to the continuing federal criminalization of cannabis under the Controlled Substances Act. Bankruptcy courts have ruled that they cannot provide relief from debts to companies whose businesses violate federal law despite state legality. While these cases dealt with companies directly involved in the cannabis business, medical marijuana has arisen as an issue in some personal bankruptcy cases.

Economic forces behind current decline in bankruptcy filings

The latest report about bankruptcy filings produced by Supreme Court Chief Justice John Roberts indicated that filings have reached their lowest number since 2010. Prior to 2010, consumers had sought bankruptcy protection in increasing numbers due to the financial collapse of 2007 and 2008. Although debts remain a concern for many people in Texas, multiple economic forces appear to be reducing the caseloads at bankruptcy courts.

New law increases bankruptcy protections for veterans

Military veterans make up about 10% of the population in Texas and around the country, and about 1 in 4 receive disability benefits from the Veterans Benefits Administration. Disability benefits paid by the Social Security Administration are protected from creditors during a personal bankruptcy, but bankruptcy judges ruled in five recent cases that Veterans Affairs benefits were not, meaning that disabled veterans were required to include their VA benefits in their disposable income disclosure paperwork.