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THE CONSUMER BANKRUPTCY LETTER |
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In This Issue:
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October 4, 2004
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FISHERMANS' WHARF OCT. 27-29
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BankruptcyBooks.com - FEATURING KINGSPRESS
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PENDING EVENTS, SEMINARS & CLE
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HEADS-UP ON RECENT CASES
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BANKRUPTCY REFORM ACTION
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DISCHARGING TAXES - THE POWER SEMINAR!
JOIN MORGAN KING AT FISHERMAN'S WHARF - SAN FRANCISCO -
OCTOBER 27, 28, 29
DISCHARGING TAXES - FUNDAMENTALS & ADVANCED PROBLEMS
The next dates scheduled for the 5th annual 3-day Bankruptcy Academy on discharging taxes in bankruptcy cases have been scheduled for -
FISHERMAN'S WHARF, S. F., on October 27, 28 & 29, 2004,
SAN ANTONIO, Texas, January 27, 28 & 29, 2005.
Additional 2005 dates are pending for Atlanta, Georgia, and Boston, Mass.
Principal presenters will be; Morgan King, attorney and author of Discharging Taxes in Bankruptcy; and other experts including Charles F. Rosen, former chief of the Los Angeles IRS office of Special Procedures (bankruptcy, insolvency); Eric M. Casper, formerly Senior Trial Attorney, Tax Division, U.S. Department of Justice - Washington, D.C.; and Robert N. Kolb, formerly with the IRS and recently the prevailing attorney for the debtor/taxpayer in two important appellate cases. The specific faculty may change depending on speaker availablity.
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), emphasizing practical handlng of tax discharge cases from A-to-Z.
CLE ACCREDITATION
Previous programs have qualified for CLE in all states for which CLE accreditation was requested. The Academy is applying for attorneys' CLE accreditation in all states for which CLE is mandatory.
CPE accreditation from the IRS for enrolled agents has been approved.
TUITION
Single attorney for Fisherman's Wharf or San Antonio $695
Single attorney from Northern California $395 until Oct. 12
Double attorney registration any location $995 (saves $400!)
Paralegal or other office staff any location $350
Enrolled agent or CPA any location $495
For more information about the Tax Discharge program, or to enroll, click on red below or call (925) 829-6460 west coast time.
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October 27-29, 2004
KING BANKRUPTCY ACADEMY
Discharging Taxes in Bankruptcy From A to Z
Fisherman's Wharf, San Francisco
BankruptyAcademy.com
November 5-8, 2004
13th ANNUAL CONSUMER RIGHTS LITIGATION CONFERENCE
Boston, MA
NCLC.org
December 3, 2004
13tth ANNUAL TIDEWATER BANKRUPTCY CONFERENCE
Norfolk Hilton, 1500 North Military Highway, Norfolk, Virginia.
stevenprichards@cs.com
December 2-4, 2004
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Marriott's Camelback Inn, Scottsdale, AZ
Contact: 1-703-739-0800 or http://www.abiworld.org
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SOME ACTION ON BANKRUPTCY REFORM
Apparently the powers that be, who still hold out some hope of passage of the omnibus bankruptcy reform bill (it is still out there), were able to influence the House in its consideration of HR 10, the 9/11 Commission recommendations, and the House Financial Services Committee's addition of the netting provision, HR 2120, supported by Fed. Chair Alan Greenspan, was stripped out of the bill.
David P. Goch
Washington Legislative Counsel
Commercial Law League of America
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PENSION BENEFIT AND BANKRUPTCY REFORM
SOUTHERN ILLINOIS -- A joint effort at both the state and federal levels to revamp bankruptcy laws is moving forward, three Southern Illinois lawmakers say.
U.S. Reps. Jerry Costello, D-Belleville, and John Shimkus, R-Collinsville, and state Rep. John Bradley, D-Marion, are working toward the same goal -- changing bankruptcy laws so health and pension benefits have a higher priority when companies go bankrupt.
The action by Costello, Shimkus and Bradley was prompted by the ongoing situation involving more than 3,100 coal miners and retirees who lost health care benefits after Horizon Natural Resources filed for bankruptcy. Lawyers for Horizon argued successfully during bankruptcy hearings last July and August that -- as part of its bankruptcy reorganization plan -- Horizon should not be held responsible for health care benefits for the union miners and retirees who had previously worked for Zeigler Coal and Old Ben Coal.
BY JIM MUIR
THE SOUTHERN
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At the Senate Commerce, Science, and Transportation Committee hearing yesterday, focusing on federal pensions and bankruptcy policy in light of the airlines, the Pension Benefit Guaranty Corporation, according to its Executive Director, stated it is facing a growing deficit, due in a large part to airline bankruptcies.
Citing United Airlines and, again, US Airways, both of which have said they have suspended contributions to pension plans during bankruptcy, it was estimated the total exposure of plan participants and the pension insurance program to the airline industry was $31 billion on a termination basis at the end of 2003.
The PBGC stated that, although the airline industry problems are cause for concern, they are merely symptomatic of broader and deeper problems confronting the pension insurance program, plan sponsors, and beneficiaries, which is that, "[All] companies should be held accountable to make good on the pension promises they have made to their workers and retirees."
The PBGC pointed out that ordinarily, if a pension payment is missed, a lien arises and the agency may perfect and enforce the lien on behalf of the pension plan. However, when in bankruptcy, perfection of a lien is automatically stayed. Thus, the PBGC proposed creating an exception to the automatic stay would better enable the PBGC to protect the interests of workers.
David P. Goch
Washington Legislative Counsel
Commercial Law League of America
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HOUSE PASSES CHAPTER 12 EXTENSION
Late Friday evening, the House passed S. 2864, a bill extending for eighteen months, retroactive back to January 1, 2004, the period for Chapter 12 of title 11, United States Code. It can now be sent to the President for signature.
David P. Goch
Washington Legislative Counsel
Commercial Law League of Americ
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POST-PETITION INTEREST ON EDUCATIONAL LOAN NOT DISCHARGEABLE IN CHAPTER 13
Educational Credit Management Corporation (ECMC) objects to confirmation of debtors' Chapter 13 plan. ECMC appears by N. Larry Bork of Topeka. Debtors Jon and Lisa Delgado appear by Donald B. Clark. In their plan, debtors seek to discharge accrued post-petition interest and collection charges on Jon's student loan.
Debtors make no assertion that they are unable to repay the loan without suffering undue hardship. In its objection, ECMC asserts that debtors' educational loan including post-petition interest and any other charges is excepted from discharge by 11 U.S.C. §§ 523 (a) (8) and 1328(a)(2) and that debtors should not "bootstrap" a discharge of this portion of its claim into their
plan.
The Code is clear that debts for the repayment of educational loans are not dischargeable, however it contains no direct reference to whether post-petition interest on a nondischargeable student loan is discharged. The leading case on the dischargeability of post-petition interest is Bruning v. United States, 376 U.S. 358, 84 S. Ct. 906, 11 L.Ed.2d 772 (1964), which was decided under the Bankruptcy Act and dealt with the dischargeability of post-petition interest on tax debts. In Bruning, the Supreme Court held that although post-petition interest on a nondischargeable tax debt could not be paid by the bankruptcy estate, it accrued during the pendency of the case and became a personal liability of the debtor when the bankruptcy was completed. The Supreme Court reasoned that because Congress excepted the tax debt from discharge, it "clearly intended that personal liability for unpaid tax debts survive bankruptcy."
The personal liability of a debtor for post-petition interest accruing on a pre-petition nondischargeable debt for a student loan is therefore not discharged in debtors' chapter 13 plan.
IN RE DELGADO, (Kan. 2000)
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MEDICAL HARDSHIP DISCHARGE FOR SCHOOL LOAN REQUIRES COMPETENT EVIDENCE
Generally, a disability which prevents a debtor from working constitutes additional circumstances sufficient to satisfy prong two of the Brunner test.
However, bankruptcy courts have held that a debtor whose additional circumstances involve the debtor's health or medical condition must present more than the debtor's unsupported testimony. See In re Swinney, 266 B.R 800, 805 (Bankr. N.D. Ohio 2001) (noting that "[a]lthough such evidence does not have to necessarily consist of extensive expert testimony, such evidence should consist of more than simply bare allegations; that is, whenever a debtor's health, whether mental or physical, is directly put at issue some corroborating evidence must be given supporting the proponent's position.") Cf. Ryan v. Department of Education, (In re Ryan), 310 B.R. 387, 389-390 (Bankr. S.D. Ill. 2004) (finding that medical records which acknowledged the debtor's various medical problems but did not specifically find that such problems prevented her from working were insufficient).
IN RE FOLSOM, (M.D.Fla. 2004)
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CONCEALMENT OF BOOKS AND RECORDS NOT FOUND
William L. Hall filed a voluntary petition in bankruptcy pursuant to chapter 7 of the United States Bankruptcy Code in this court on June 18, 2003. This adversary proceeding was filed on September 22, 2003. In his complaint, Sulaimani alleges that Hall should be denied a discharge under section 727 (a)(3) for concealment and failure to preserve financial records and under section 727(a)(5) for failure to explain and/or disclose the loss of assets.
In the present case, Hall did keep books and records of his financial affairs. They consisted of bank statements, tax returns and other ordinary documentation. In addition, he subpoenaed and provided the bank records of Europa Salon and Susan Hall. Furthermore, he provided their joint tax returns for 2001 and 2002 and the tax returns of Europa Salon for 2001, 2002 and 2003. The court finds that the plaintiff did not meet his burden in proving that the debtor has failed to provide or concealed his financial records from his creditors.
IN RE HALL, (E.D.Va. 2004)
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PUBLISHED BY KING BANKRUPTCY MEDIA FOR BANKRUPTCY PROFESSIONALS 7080 Donlon Way Suite 222 Dublin California 94568 (925) 829-6460
© King Bankruptcy Media 2004 CONTACT US AT editor@bankruptcymedia.com
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