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THE CONSUMER BANKRUPTCY LETTER
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In This Issue:
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MAR. 1, 2004
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BANKRUPTCY ACADEMY SCHEDULES SEPTEMBER DATE
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“HOLD-HARMLESS” CLAUSE IS MARITAL DEBT
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CHAPTER 13 DEBT LIMITS, EXEMPTION LIMITS RAISED
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CHAPTER 7 & 13 COMBO at BankruptcyBooks.com
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KERRY AGAINST BK REFORM
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KING BANKRUPTCY ACADEMY SCHEDULES 3-DAY SEMINAR ON DISCHARGING TAXES - SEPT. 8, 9, AND 10
The first date scheduled for the 5th annual Bankruptcy Academy program on discharging taxes in bankruptcy cases has been scheduled for Las Vegas, Nevada, on Sept. 8, 9 & 10, 2004.
Principal presenters will be; Morgan King, attorney and author of Discharging Taxes in Bankruptcy; Charles F. Rosen, former chief of the Los Angeles IRS office of Special Procedures (bankruptcy, insolvency); and Eric M. Casper, formerly Senior Trial Attorney, Tax Division, U.S. Department of Justice - Washington, D.C.
The 3-day seminar and workshop will be a thorough exploration of bankruptcy remedies for delinquent taxes and tax liens in consumer bankruptcy cases (chapter 7 and chapter 13).
Additional tax discharge programs will be scheduled for Fisherman's Wharf in San Francisco, and San Antonio, Texas. Dates will be announced soon.
Academy courses on other aspects of consumer bankruptcy practice will be announced soon.
Early registration for the September program saves $100 off the regular enrollment fee of $695. All previous programs have qualified for CLE in all states for which CLE accreditation was requested. On request the Academy will assist in obtaining CLE accreditation for an enrollee's state.
For more information about the Tax Discharge program, or to enroll, click on red below. For more information on the Academy in general, click on the image at right or visit BankruptcyAcademy.com.
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CHAPTER 13 DEBT LIMITS INCREASED
ADMINISTRATIVE OFFICE OF THE U.S. COURTS ANNOUNCES INCREASES IN VARIOUS DEBT LIMITS
As of April 1, 2004 the eligibility debt limits for Chapter 13 pursuant to 11 U.S.C. § 109(e) are raised. The new limits are:
Uncontingent, liquidated unsecured debts ... $307,675.
Uncontingent, liquidated secured debts ...... $922,975
New limits for exemptions under 11 U.S.C. § 522(d):
Section 522(d)--value of property
exemptions allowed to the debtor:
(1)--in paragraph (1)............... 18,450
(2)--in paragraph (2)............... 2,950
(3)--in paragraph (3)............... 475
9,850
(4)--in paragraph (4)............... 1,225
(5)--in paragraph (5)............... 975
9,250
(6)--in paragraph (6)............... 1,850
(7)--in paragraph (8)............... 9,850
(8)--in paragraph (11)(D).......... 18,450
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MORE BANKRUPTCY COURTS ACCEPT CREDIT CARD PAYMENTS ONLINE
A growing number of federal bankruptcy courts are equipped to accept credit card payments over the Internet.
The option, made possible by a U.S. Treasury initiative, not only can benefit courts, but attorneys can pay filing fees and review their payment history and outstanding fees over the Internet any time of day.
To date, 32 bankruptcy courts have Internet credit card capability. They are: Alaska, Arkansas Eastern, California Northern, California Southern, Colorado, Delaware, Florida Middle, Georgia Northern, Hawaii, Illinois Southern, Indiana Northern, Iowa Northern, Iowa Southern, Kentucky Eastern, Kentucky Western, Maryland, Massachusetts, Missouri Eastern, Missouri Western, New Jersey, Nevada, New York Southern, New York Western, Ohio Southern, Oklahoma Northern, Rhode Island, South Carolina, Tennessee Western, Texas Northern, Utah, West Virginia Southern, and Wyoming.
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BANKRUPTCY FILINGS NEAR 12-MONTH HIGHS
WASHINGTON - U.S. bankruptcy filings in 2003 were barely changed from record 12-month highs reported three months earlier, a government report released on Wednesday showed.
Personal bankruptcies for all of 2003 rose 5.6 percent to 1.63 million from a year earlier while business filings fell 9.1 percent to 35,037, according to data from the Administrative Office of the U.S. Courts.
Total calendar 2003 bankruptcy filings of 1,660,245 were up 5.2 percent from 2002 but were just shy of the 1,661,996 historic high reported for the courts' fiscal year that ended Sept. 30, 2003.
"Today's announcement underscores the continued hangover effect of high levels of consumer spending and debt acquired over the last decade," said Samuel Gerdano, executive director of the American Bankruptcy
Institute.
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HELD, DEBTOR'S CONTRIBUTIONS TO 401(k) PLAN IS DISPOSABLE INCOME IN SUBSTANTIAL ABUSE TEST
The bankruptcy court did not err in including 401(k) contributions in debtors' "disposable income" for the purpose of assessing whether the debtors' Ch.7 filing was a substantial abuse. "[I]t would be unfair to the creditors to allow the Debtors in the present case to commit part of their earnings to the payment of their own retirement fund while at the same time paying their creditors less than a 100% dividend."
In re Behlke (6th Cir. BAP 2004)
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HELD, COURT CAN'T DO PARTIAL DISCHARGE OF A STUDENT LOAN: DEBTOR WOULD BE 76 YEARS OLD - HARDSHIP DISCHARGE GRANTED
Dischargeability depends on a debtor's future ability to pay the entire student loan obligation. The court should not consider that the Department of Education would accept payments under a modified repayment plan that has not yet been formulated. The court does not have the authority to modify the payment terms of a student loan or to discharge a partial amount of principal or accrued interest.
A debtor who would be 76 years old when her student loan was paid off under a 25-year payment schedule is entitled to an undue hardship discharge.
In re Faktor (Bankr. N.D. Ia. 2004)
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HOLD-HARMLESS CLAUSE IN DIVORCE ORDER IS A NEW “DEBT” THAT MAY BE EXCEPTED FROM DISCHARGE UNDER § 523(a)(15)(A) & (B)
Pennsylvania law gives Plaintiff the right to enforce Debtor's compliance with the orders entered against him during their divorce proceeding. Despite the fact that part of the obligation at issue is couched in "hold harmless" language, this statutory right imposes an implied obligation on Debtor to hold Plaintiff harmless from future liability to the IRS, Pennsylvania Department of Revenue, and Debtor's parents, in addition to paying court costs, whether or not specific indemnification language is present.
This right, coupled with an entered order, creates a new liability running from Debtor to Plaintiff which was not in existence prior to the commencement of the divorce proceeding. The Court is convinced that Debtor incurred these debts during his divorce.
(The court ultimately held the debt not excepted from discharge on the basis of debtor's inability to pay the obligation).
In re Hazelton, (M.D.Pa. 2003)
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Click below to order set. Click on image at right to visit BankruptcyBooks.com - over 100 selections to choose from
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THE PASSION OF THE DEBTOR'S ATTORNEY
Upon finding themselves deceased, a bankruptcy judge, a U.S. trustee, and a debtor's attorney appeared before St. Peter.
St. Peter asked the judge what he had done for humanity. "I ordered Rooker Feldman to disgorge his fees for over 1,000 cases, because he was too well-dressed when he came into bankruptcy court.”
St. Peter smiled. "Very good. You may enter into God's presence."
St. Peter then asked the U.S. trustee what he had done to help mankind.
"I reported Rooker Feldman to the U.S. Department of Justice to be prosecuted for disagreeing with a Chapter 7 trustee."
St. Peter smiled. "Excellent! You may pass into God's presence."
Finally, he asked Rooker Feldman what he had done for mankind.
Rooker Feldman thought for a long time. As the seconds passed into minutes, he broke out in a cold sweat. He gnashed his teeth and wrung his hands. Finally, a gave a great sigh and spoke.
“Uhh . . . well, I let myself be sacrificed by the trustee, to atone for the wrongs of my debtor-attorney colleagues. Then, three days after disbarment, I rose from the floor and dedicated my life to revenge.”
St. Peter looked surprised. “But,” he sputtered, ”Revenge is mine, sayeth the Lord.”
“What?” blurted Rooker. ”God wants my horse, Revenge? Well, why not? I'm just a damned debtor's attorney, not worthy of anything good in life or in death. Go ahead, take my horse.”
St. Peter smiled. “There, there,” he said comfortingly. “I have good news. For your humility and suffering on behalf of all debtors' attorneys, you may also pass into God's presence, along with the judge and the trustee.”
Feldman's eyes bulged. “I'm to spend eternity with a bankruptcy judge and a trustee?”
Feldman took out his last twenty-dollar bill and pressed it into St. Peter's hand. He crept up closer and whispered in St. Peter's ear.
“Say, pal, don't you think I'm entitled to just one little teensy break? Couldn't you just send me to Hell instead?”
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