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THE CONSUMER BANKRUPTCY LETTER |
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In This Issue:
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February 7 2005
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TAX DISCHARGE IN BOSTON!
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From BankruptcyBooks.com
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FEATURED SITE #6: QUICK GUIDE TO EXEMPTIONS
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HEADS-UP ON RECENT CASES
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REFORM BILL INTRODUCED IN SENATE
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Feb. 1 2005
BANKRUPTCY REFORM BILL IS INTRODUCED IN SENATE
As anticipated, Sen. Grassley (R-Iowa) introduced comprehensive bankruptcy reform legislation on February 1. The cosponsors of this bill, S. 256, are Senators' Hatch (R-UT), Sessions (R-AL), Thune (R-SD), Carper (D-DE), Nelson (D-FL), Shelby (R-AL) and Enzi (R-WY).
The language is substantially similiar to last year's H.R. 975 but does not include Sen. Schumer's (D-NY) "abortion language".
Update Feb. 2 2005
S. 256 IS READ IN JUDICIARY COMMITTEE
The bankruptcy reform legislation, S. 256, has been twice read before the Senate Judiciary Committee and is awaiting further action.
Update Feb. 4 2005
HEARINGS SCHEDULED FOR BANKRUPTCY REFORM BILL
The Senate Judiciary Committee will be conducting a hearing on S. 256 next Thursday, February 10th. The hearing is currently scheduled for 2 p.m. The witness list has not yet been finalized.
Obviously Republicans are attempting to expedite this bill.
However, Senate Judiciary Chair Specter (R-PA) is negotiating with the ranking minority member, Sen. Leahy (D-VT) on the number of hearings to hold.
Further, Leahy has stated that a recent Harvard University study showed half of all bankruptcy filings in 2001 were triggered by a medical emergency, which called into question the traditionally understood premise for the bill, that debtors are abusing the system.
Despite this negotiation, Specter has still indicated he'd like the Judiciary Committee to vote on the bill by February 21st.
READ SEN. GRASSLEY'S PRESS RELEASE - CLICK BELOW
David P. Goch
Washington Legislative Counsel
Commercial Law League of America
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CONFIRMATION OF PLAN CANNOT SUPPLANT REQUIREMENT FOR ADJUDICATION OF DISCHARGE
Where the bankruptcy code requires commencement of an adversary proceeding and entry of particular findings before a discharge can occur (i.e., a student loan discharge), confirmation of a plan providing for such discharge is ineffective since the creditor has been deprived of due process.
In re Hanson (7th Cir. 2005)
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AUTOMATIC STAY STOPS ACTIONS IN OTHER BANKRUPTCY COURTS
Although the automatic stay does not affect proceedings against a debtor commenced in the same bankruptcy court where the debtor's main case is pending, it does preclude actions filed in another bankruptcy court.
In re Miller (9th Cir. 2005)
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DISMISSAL OF APPEAL WAS UNDULY HARSH
Dismissal of a BAP appeal based upon the trustee/appellant's failure to provide the BAP with the judgment or the order being appealed, the complaint, and the answer, in violation of Federal Rule of Bankruptcy Procedure 8009, was an unduly harsh sanction.
In re Beachport Entertainment (9th Cir 2005)
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AFFECTED PARTY IN INTEREST HAS STANDING TO APPEAR
Where the amount owing by a party in interest may be reduced based upon the outcome of a dispute in the bankruptcy case, that party has a sufficient "pecuniary interest" to confer standing to appear and be heard in the dispute.
Although a debtor in an insolvent Chapter 7 case does not ordinarily have standing, where the outcome of a dispute would result in more funds for payment of a debt for which the debtor would remain personally liable, the debtor had standing.
There is authority that to the extent that an award of the maximum compensation allowable under § 326(a) does not result in what would appear to be an unconscionable windfall, trustees may reasonably expect to receive the maximum allowable fee. However, this court rejects the notion that the maximum fee is rebuttably reasonable, as this standard is inconsistent with the Bankruptcy Code.
Nothing in the Bankruptcy Code or Rules dispenses with the need for a trustee to maintain detailed billing records.
In re Moss (Bankr. E.D. Mi. 2005)
SOURCE; BKinformation.com
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TWO LAWYERS NURSING MARTINIS
Rooker Feldman and another bankruptcy lawyer sat at the bar nursing martinis.
“I don't get it,” muttered Feldman. “Do your client a favor and he kicks your teeth in!”
“What happened?” inquired the other attorney.
“This client comes in, and after a probing interview I discover he owns a contingent asset. He has paid for a guaranteed right to reincarnation as a wealthy man in his next life.
“The Code says you can transfer non-exempt assets to exempt assets on the eve of bankruptcy. So, I explain that there is no exemption for his present right to future wealth based on a contingency. But, because I'm one damn smart lawyer, I had an idea.
“I told him if he died and came back as a wealthy man before he filed bankruptcy, we could put the money in exempt retirement funds and a downpayment on a homestead.”
Feldman takes another sip of his martini.
“Sp the client asks, but how long do I have to wait to do that? The creditors are hounding me now!”
“So, I told him he came to the right lawyer, because I could solve his problem immediately. Then I pulled out my pistol and shot him right between the eyes.”
The other bankruptcy lawyer looked at him, impressed. “So what could go wrong with that?”
“I made a mistake. I didn't get my retainer fee up front!”
“Yup,” replied the other lawyer. “He's probably walking around somewhere, reincarnated as a wealthy man, and ignoring your bill. And after all you did for him. That's gratitude for you!”
“Worse than that,” grumbled Feldman. “The cheapskate never reincarnated. He just laid there, dead as a door nail.”
"Yup,” answered the other lawyer. “Clients. You stick your neck out for them, and they are the first ones to chop it off.”
“Then, it turns out the guaranteed reincarnation thing was nothing but a scam.”
“Bummer!” blurted Feldman.
“Yup,” answered the other lawyer. ‘“Bummer.”
Then they ordered another round of martinis.
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PUBLISHED BY KING BANKRUPTCY MEDIA FOR BANKRUPTCY PROFESSIONALS 7080 Donlon Way Suite 222 Dublin California 94568 (925) 829-6460. Morgan D. King, Editor.
© King Bankruptcy Media 2004 CONTACT US AT editor@bankruptcymedia.com
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