Finding Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. July 10, 2014) “particularly persuasive” on an issue on which debtors have had difficulty getting traction, the district court held that a creditor’s filing a proof of claim for a time-barred debt in a bankruptcy case may violate the Fair Debt Collection Practices Act,…
How Do You Determine Whether You Have Willfully Evaded the Payment of Income Tax?
Two recent Court of Appeals decisions took different approaches in determining whether a debtor’s nonpayment of a tax liability was “willful” for the purpose of Code § 523(a)(1)(C), which renders a tax debt nondischargeable if the debtor “willfully attempted in any manner to evade or defeat such tax.” The Tenth Circuit, in In re Vaughn,…
Can I Include my Mortgage Payment to Determine my Disposable Income if I am Attempting to Modify the Loan and Intend on Keeping the Property?
Yes. Affirming In re Salas, 2014 WL 92728 (Bankr. S.D. Fla. Jan. 9, 2014), the district court held that the Chapter 13 debtor, in calculating her projected disposable income, could deduct a first mortgage payment that she was not actually making, where the debtor retained the property and sought to work out a mortgage modification…
Medical Marijuana Growers Beware!!!
The Chapter 7 debtors’ case would be dismissed for cause under Code § 707(a) where the debtors derived a significant portion of their household income from the cultivation and sale of marijuana under a license granted by the state of Colorado following the legalization of marijuana in that state, and the marijuana plants, which the…
Can An Attorney Be Sanctioned For “Unbundling” Their Services?
Yes. Affirming In re Seare, 493 B.R. 158 (Bankr. D. Nev. April 9, 2013), the Ninth Circuit Bankruptcy Appellate Panel held that the bankruptcy court did not abuse its discretion in sanctioning an attorney who, in representing a married couple that filed a Chapter 7 petition, entered into a retainer agreement with the debtors that…
Chapter Does a Chapter 13 plan preclude an IRS offset against debtor’s tax overpayment?
As reported by Robin Miller of CBAR, a Chapter 13 plan confirmation does not preclude IRS offset against debtor’s tax overpayment. The nonbankruptcy right to setoff continues even after confirmation of a Chapter 13 plan. See In re Rivera, 345 B.R. 229 (Bankr. E.D. Cal. 2005). Similarly, the IRS’s procedures under 26 U.S.C. § 6402(a) for…
Can a Debtor Establish “Undue Hardship” Despite the Availability of an “Income-Based Repayment” Program with No Payment Due in a Bankruptcy Proceeding?
Yes! As reported by Robin Miller of CBAR, affirming In re Al-Riyami, 2014 WL 2800815 (Bankr. M.D. Ala., Jan. 6, 2014), the district court found no error in the bankruptcy court’s determination under Code § 523(a)(8) that requiring the debtor to repay her student loans would cause her undue hardship, even though, under an income-based…