Michigan Bankruptcy and 1040 Income Taxes. Yes, provided the 5 following rules are met: 1. The taxes at issued must be 1040 Income Taxes. Taxes such as payroll taxes, trust fund taxes, sales tax or fraud taxes are treated differently. 2. The 3 Year Rule. The income tax return for which the taxes are owed must have been due at least 3 years before you file for bankruptcy – including any extensions. Generally, the due date is April 15 of the year the return is due. If an extension is filed, then the due date is extended to August 15 or October 15 of that year. For example, if a tax was due from a 2008 income tax return, the due date of that tax…
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Bankruptcy in Michigan-Reaffirmation Agreement Based On Mutual Mistake Voided
Bankruptcy in Michigan -Reaffirmation Agreement. After filing a Ch. 7 bankruptcy, a reaffirmation agreement was signed for two separate bank loan debts that would have both been dischargeable. The Debtors Jackie and Peggy Bailey abruptly stopped paying Salyersville National Bank, which tried unsuccessfully to repossess a truck pledged as security. SNB filed a “wholly unsecured claim” against this. The Standing Trustee found SNB hadn’t perfected the mortgage lien. Both parties reached an agreement to sell the real property. The Bank bought it, then resold it to a third party at profit. SNB filed an unsecured claim for the full balance owed on the mortgage. They received payments from the bankruptcy on the two loans. A reaffirmation agreement can be enforced only to the extent as…
Bankruptcy in Michigan – 6th Circuit Says Perfection Follows Secured Lien, Even After Assignment
Michigan Bankruptcy Secured Lien. The Bankruptcy Court for the Northern District of OH said Wells Fargo Bank lacked standing to seek relief from the automatic stay in the filed Ch. 7 of Megan Rice. WFB appealed the decision to the 6th Circuit Appellate Panel. Debtor Rice had previously financed a Trailblazer. In turn, the security interest was transferred from the dealership to Wells Fargo Auto Finance, and finally to WFB. The security interest transfer wasn’t recorded, nor entered on the Debtor’s title. The Bankruptcy Court didn’t think WFB was the proper party to bring this Motion for Relief, being they couldn’t show a valid assignment (to them) on the Debtor’s Trailblazer title. WFB argued to the Court they were entitled to file stay relief. OH…
Look if Debtors are “Needy” – to Keep Tax Refunds, Give to 401K
An above median income family didn’t include their 401K contributions and tax refunds into their disposable income calculation. The UST filed a Motion to Dismiss James and Heidi Kehl’s Ch. 7 filing in the Eastern District of MI, Southern Division. The UST argued at an evidentiary hearing the ability of the Debtors to pay on their unsecured debt is significant, without this diminishing their present standard of living. The UST must establish by a preponderance of the evidence that there is an abuse of the relief provisions of a Ch. 7 for dismissal. To determine if there is abuse the Bankruptcy Court must decide if the Debtors are “honest and needy”. Truthful and undeceptive with (their) creditors is considered honesty. The view that a debt…
Major Fees And Damages After Failed Involuntary Chapter 7
The dismissal of an involuntary Ch. 7 resulted in a decision against petitioning creditor Kevin Adell, in favor of alleged debtor JRH LLC. The Honigman firm successfully defended JRH from the failed involuntary petition, obtaining a judgment against Adell for compensatory and punitive damages, plus being granted fees and costs under Sec. 303(i) of the Bankruptcy Code. Honigman sought an award of further fees from Adell for years of continuous legal services; defenses of the original judgment during appeals, attempting to collect on it, defense of JRH in Adell’s bankruptcy (commenced as 11, converted to 7, and ultimately dismissed). JRH filed a Motion for Additional Punitive Damages against Adell for post-award conduct. The matters for consideration were remanded from the U.S. District Court to the…
Are most debt consolidation plans a rip off?
Most debt consolidation programs in Michigan are a rip off.
Michigan Median Income Levels Change on November 1, 2010
The “New” Bankruptcy law from 2005 establishes a median income to determine whether you can file a Chapter 7 or whether you have to consider filing a Chapter 13. The median income is calculated on a State by State basis and is further determined by household size–just think of “heads on the beds.” As you may have guessed, things in Michigan are getting worse and the median income thresholds are decreasing. Effective November 1, 2010, the Median Income figures for Michigan will change as follows: Household Size Old New 1 person: $43,456 DOWN to $41.875. 2 persons: $52,433 DOWN to $49,919. 3 persons: $61,517 DOWN to $59,190. 4 persons: $74,558 DOWN to $70,600. 5 or more: Add $7,500…