|
 |
THE CONSUMER BANKRUPTCY LETTER
|
|
|
In This Issue:
|
MAR. 29, 2004
|
|
|
|
•
|
TAX DISCHARGE TOPICS ON ACADEMY AGENDA
|
|
|
|
•
|
FIXED FEES MUST BE PAID PREPETITION
|
|
|
|
|
•
|
CREDIT COUNSELING: A SCAM?
|
|
|
|
•
|
FEATURED BOOKS at Bankruptcybooks.com
|
|
|
|
|
•
|
TAX DELINQUENCIES INCREASE 21%
|
|
|
|
|
|
KING BANKRUPTCY ACADEMY SCHEDULES 3-DAY SEMINARS ON DISCHARGING TAXES - LAS VEGAS & SAN FRANCISCO
The first dates scheduled for the 5th annual Bankruptcy Academy program on discharging taxes in bankruptcy cases have been scheduled for LAS VEGAS, Nevada, on Sept. 8, 9 & 10, and at FISHERMAN'S WHARF, San Francisco, October 27, 28, 29, 2004.
SUBJECTS COVERED INCLUDE -
* The basic rules of discharging taxes in Chapter 7 and Chapter 13
* What is a tax return?
* What is willful attempt to evade the tax?
* Dischargeability of income taxes, payroll taxes, sales & use taxes
* What portion of a trust fund-payroll tax is dischargeable?
* How the IRS insolvency function works - practical information
* Handling tax claims and liens in Chapter 13 plans
* Attacking or avoiding tax liens in bankruptcy
* Negotiating with IRS after discharge to remove tax lien
* Valuation of tax liens in Chapter 13
* What to do with tax levies
* Dealing with sovereign immunity of states
* Other violation of stay issues
* Obtaining and understanding tax transcripts
* Tolling events
* Traps for the unwary & frequently missed opportunities
* Other practical aspects of handling delinquent tax liabilities
* Tips on litigating tax liability & discharge in bankruptcy court
Enroll before May 1 and save $100!
For more information about the Tax Discharge program, or to enroll, click on red below.
|
|
|
|
|
SENATE REPORT FINDS ABUSE
Credit counseling agencies are coming under increased scrutiny for fraud and abuse of consumers, according to a report by the Senate Governmental Affairs Committee.
Consumer complaints against such agencies are on the rise. Investigators found a pattern among such entities, including high-pressure sales tactics, demands for money up front, failure to make payments to creditors, and no budget education or actual counseling being performed.
Credit counselors historically have been financed by banks that issue credit cards, but these contributions are declining, forcing agencies to charge fees.
"Clearly, something is wrong with the credit counseling industry," said Sen. Norm Coleman, R-Minn.
SOURCE: AP
________________________
FEDERAL COURTS FACE CUTBACKS DUE TO BUDGET CONSTRAINTS
Because of budget shortfalls, federal courts are being forced to lay off more than 165 employees and will furlough 10 percent of their workforce on a temporary basis before the end of the fiscal year on Sept. 30, the U.S. Judicial Conference announced this week.
Lawyers throughout the country may already be feeling the impact. The clerk’s office in Hawaii is operating on reduced hours, and many courts are trimming staff through attrition and encouraging early retirement.
As of March 7, throughout the United States, 388 court employees have opted for early retirement, 85 employees have been laid off, and 676 have been furloughed for varying amounts of time, according to David Sellers, a spokesman for the Administrative Office of the U.S. Courts.
|
|
|
|
|
FEES EARNED PREPETITION CANNOT BE COLLECTED POSTPETITION
Held, disclosure of compensation filed by Debtor's attorney must distinguish between payments received prepetition versus postpetition.
Any debt that a debtor owes, as of the petition date, to his bankruptcy attorney for legal fees is subject to discharge under Section 727. Any attempt to collect such fees during the pendency of the case would violate the automatic stay and any attempt to collect such fees after the discharge is granted would violate the discharge injunction, thereby exposing the attorney to possible sanctions. Bethea v. Robert J. Adams & Associates, 352 F.3d 1125 (7th Cir. 2003). When the fee agreement is for a flat fee for all legal services, whether pre-or-postpetition, it follows directly from Bethea that the flat fee, to be permissibly collectible, must be paid prepetition. Any portion of a flat fee not paid prepetition is uncollectible during the case because of the automatic stay and becomes permanently uncollectible upon entry of the discharge order.
Where the fee agreement is for an hourly fee, the fees accrued from prepetition work may only permissibly be paid prepetition, since the “debt” for hourly fees arises at the time that the work is performed, regardless of when the billing statement is sent to the client. Any amount for hourly fees earned, but not paid, prepetition, is subject to discharge, the same as for an unpaid flat fee. An hourly fee for work performed after the filing is a postpetition debt that is not covered by the scope of the discharge under Section 727.
In re Fischer __ B.R. __ (Bankr. C.D. Ill. 2004)
_________________________
TAX ASSESSMENT AGAINST PARTNERSHIP APPLIES TO PARTNERS
So long as the IRS assesses a partnership's tax liability against the partnership within three years, it is not required to separately assess the partnership's tax liabilities against the general partners in order to preserve its 10-year period to collect from the general partners.
United States v. Galletti __ S. Ct. __ (2004)
_________________________
ORAL REPRESENTATIONS DID NOT CONSTITUTE FRAUD
Debtors' oral representations that the sale of their other real property would allow a quick payoff of the amount they owed Plaintiffs and that Debtor would be receiving a managerial position were statements respecting their financial condition and were thus not actionable under 11 U.S.C. 523(a)(2)(A). Debtors' oral representations that the sale of their other real property would allow a quick payoff of the amount they owed Plaintiffs and that Debtor would be receiving a managerial position were not made in or in connection with Debtors' case and were thus not actionable under 11 U.S.C. 727(a)(4)(C).
In re Wood (Bankr. S.D. 2004)
|
|
|
|
|
Kings combo, CHAPTER 7 LAW & PRACTICE + CHAPTER 13 LAW & PRACTICE - save $58 / To order this book click on image at right . . .
Morgan King, FEES & ETHICS IN CONSUMER BANKRUPTCY CASES
Pamela I. Everett, BANKRUPTCY COURTS & PROCEDURES
Dahlstrom, BANKRUPTCY CODE & RULES BOOKLET
William Elliott, FEDERAL TAX COLLECTIONS, LIENS & LEVIES
Michael Crames and Herbert Edelman, FUNDAMENTALS OF BANKRUPTCY & CORPORATE REORGANIZATION
Stephanie Wickouski, BANKRUPTCY CRIMES
Morgan King, DISCHARGING TAXES IN BANKRUPTCY
____________________________
For online bankruptcy case legal research, visit SearchCases.com
|
|
|
|
|
FELDMAN RAISES TRUSTEE ALERT
Rooker Feldman, director of the National So Busted Intelligence Service, has raised the Trustee alert for consumer bankruptcy lawyers to BLACK (elevated).
"We've noticed a substantial increase in trustee chatter," noted Feldman at this morning's news conference. "We don't know which debtor's attorney the trustees will go after next, but we feel all attorneys should be on the alert."
An increase in chatter, he went on to note, usually indicates a new directive has come down from the Office of U.S. Trustee.
"It could take any of a number of forms," said Feldman. "We've seen unrealistic demands on debtors to produce their credit card receipts for the last 25 years; a list of every person the debtor has given a gift to worth more than $1 for the past ten years; a written appraisal on the debtor's home, even if the debtor doesn't own a home; and surrender of the debtor's first-born to the trustee. Also, watch out for trustee's preemptive strikes with Weapons of Miserly Disgorgement."
Feldman suggests that debtors' attorneys take appropriate precautions; keep an eye on the trustee at all times, take valium, and try to get a life.
"We're in for a long battle," he said. "There will be casualties."
-------------------------------------------------------------------
REGISTER FOR THE NACBA CONVENTION APRIL 23 - BOSTON, MA
Visit NACBA.com
|
|
|
|
 |
|
|
|
|
