From the Editor – Chapter 7 Issues • NACTT Academy

From the Editor – Chapter 7 Issues

By The Honorable William Houston Brown (Retired)

Priority Claims: Payment of priority, nondischargeable tax did not subrogate debtors to rights of tax authority. In their schedules, the Chapter 7 debtors admitted liability for prepetition sales and withholding taxes, which fell within § 507(a)(8)(C) and § 523(a)(1)(A)’s exception from discharge. The case administration continued after the grant of discharge, and the debtors had negotiated with the state an amount of nondischargeable taxes, which they had substantially paid. The debtors then sought reimbursement from the trustee of their tax payments, but adopting the . . .

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From the Editor – Claims

June 21, 2020

By The Honorable William Houston Brown (Retired) Objection to proof of claim barred by preclusion. The Chapter 13 debtor objected to Wells Fargo’s proof of claim in an adversary proceeding that alleged the note had been procured by fraud and was unenforceable; but the debtor had previously litigated those and other issues in the state court. Preclusive effect of the...

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Escrow 101 – Part 1 of 3

August 29, 2021

By Michael J. McCormick, Esq., McCalla Raymer Leibert Pierce, LLC (Roswell, GA) Escrow 101 – Part 2 Escrow 101 – Part 3 Escrow 102 – Part 1 Escrow 102 – Part 2

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Ask Ms. Ps & Qs

Nancy B. Rapoport

November 12, 2023

Cathy Moran’s article Bankruptcy Lawyer Must Have Otherworldly Powers raised an interesting issue: what should a lawyer do when a client calls and says, “what the heck IS this [notice, letter, order, whatever] that I just got?” Professor Rapoport’s take on this issue is not at all what you would expect. She puts the responsibility squarely on . . .

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Critical Case Comment – Post-Petition 401(k) Contributions ARE Disposable Income

Henry E. Hildebrand, III

July 23, 2023

Post-petition voluntary contributions to a 401(k) are not reasonably necessary expenses and are thus included in disposable income in calculating a debtor’s Chapter 13 plan. (Freeman) In re Saldana, 2023 WL 3483241 (N.D. Cal. May 15, 2023) Case Summary In April of 2022, Jorden Marie Saldana filed a voluntary petition under Chapter 13. Ms. Saldana was single with no dependents...

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CFPB Settles with Student CU Connect CUSO Over ITT Private Loan Program

June 16, 2019

On 6/14/19, the CFPB (Bureau) announced a settlement with Student CU Connect CUSO, LLC (CUSO), a company set up to hold and manage private loans for students at ITT Technical Institute. The Bureau filed a complaint and a proposed stipulated judgment in federal district court for the Southern District of Indiana alleging that CUSO provided substantial assistance to ITT Educational...

Analyzing the Troubled Chapter 13 During COVID19

May 3, 2020

By Cathy Moran, Esq. (Redwood City, CA) After the pandemic, when the economy lurches back into motion, bankruptcy lawyers will confront a clutch of troubled Chapter 13 cases. In the face of disruption, distress, and the unknown, we'll be called on to guide clients forward, in one direction or another. Let's review the questions we'll need to answer in order...

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Critical Case Comment – Swackhammer Smackdown

Henry E. Hildebrand, III

July 2, 2023

In order to modify a plan confirmed under Chapter 12 pursuant to § 1229, the movant must demonstrate that there was a substantial change in circumstances that is sufficient to justify modification of a plan. (Norton) Farm Credit Services of America PCA v. Swackhammer, 2023 WL 3591920 (8th Cir. BAP May 23, 2023) Case Summary The Swackhammers were farmers who...

IRS Updates Guidance for Deductible Business, Charitable, Medical and Moving Expenses

November 17, 2019

11/14/19, the IRS issued guidance for taxpayers with certain deductible expenses to reflect changes resulting from the Tax Cuts and Jobs Act (TCJA). Revenue Procedure 2019-46, posted today on IRS.gov, updates the rules for using the optional standard mileage rates in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The guidance also...

Tax Projections and the Means Test

September 15, 2019

By Cathy Moran, Esq. (Redwood City, CA) Mention tax calculations to a bankruptcy attorney and 7 out of 10 freeze on the spot. I'm not a tax attorney, they retort. That's right, but, if you are a bankruptcy attorney, that doesn't relieve you from knowing enough tax to get the means test right. Not to mention not giving up your...

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In re Evans: Disgorging Chapter 13 Trustee Fees in Cases Dismissed Prior to Confirmation

March 15, 2020

By Jen Grondahl Lee, Jen Lee Law, Inc. (San Ramon, CA) When is a collected fee not a collected fee? When the statutes authorizing payment to the standing Chapter 13 trustee do not provide clear guidance on when that fee is paid and/or earned. The most recent case on this issue is In re Evans (Bankr. Idaho 2020).1 In a...

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