Consumer Bankruptcy Committee

ABI Committee News

910 Claim Litigation: Still in the Early Innings

We are very much in the early innings on issues involving 910 claims under the hanging paragraph of 11 U.S.C. §1325(a)(9). Until the relief of appellate decisions enters the game, there may not be a lot of uniformity of this bankruptcy law. One issue, however, seems resolved at the starting pitch. Lacking the labyrinthine statutory construction problems encrusting most of the hanging paragraph, courts are consistently holding that the standards of Till v. SCS Credit Corp., 541 U.S. 465, 124 S. Ct. 1951, 158 L. Ed. 2d 787 (2004), apply to 910 claims in order to provide a creditor with the present value of its claim. In re McCormick, 2006 WL 3499226 (Bankr. E.D. Wis.); see In re Vagi, 351 B.R. 881 (Bankr. N.D. Ohio 2006); In re Robinson, 338 B.R. 70 (Bankr. W.D. Mo. 2006); In re Finnegan (Bankr. M.D. Pa.), No. 1-06-00198 (Opinion Nov. 30, 2006, France, J.). It’s the remaining issues that are being hit all over the ballpark.

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The IRS’ Policy of Refusing to Process Offers-in-Compromise Submitted by Taxpayers in Bankruptcy: A Roadblock to a Business Owner’s “Fresh Start” in Chapter 13

The frequency with which small businesses fail gives rise to a common scenario: Former small-business owners finding themselves burdened with not only personally guaranteed trade payables, but also with significant amounts of business-related tax obligations, commonly in the form of tax penalties assessed personally against the business’ principals under 26 U.S.C. §6672.

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Automatics, Stays, Dismissals and Ethical Traps for the Unwary

Pursuant to 11 U.S.C §521, in In re Riddle, a debtor’s failure to file payroll records within 45 days of filing his bankruptcy petition resulted in the automatic dismissal of his case. Even if the debtor had timely submitted the records to the former trustee, such submission did not satisfy the requirement to file the records with the court.

Read the full article. (Materials from the 2007 Rocky Mountain Bankruptcy Conference)

Individual Cases under Chapter 11 of the Bankruptcy Code

While individuals could always file chapter 11, not that many took advantage of it. Most individuals who had large amounts of unsecured dept simply filed under chapter 7. This will not be possible where the individual has a large amount of consumer debt and the individual is over the median income for the given state. If the individual does not qualify for chapter 13, they will have to file under chapter 11. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) amended the Bankruptcy Code to include a number of provisions that now bring a chapter 11 case for individuals more in line with that of a case under chapter 13.

Read the full article. (Materials from the 2007 Rocky Mountain Bankruptcy Conference)

Agenda for the 2007 Annual Spring Meeting

“Section 707(b) After BAPCPA: What Comes In? What Goes Out?  (A Review of the Cases on Income and Expense Calculations under the Means Test)”

Judge Eileen Hollowell (U.S. Bankruptcy Court for the District of Arizona); Diane Kearns (Chapter 13 Trustee, Arizona); Mark Redmiles (Chief, Civil Enforcement Unit, Office of the U.S. Trustee).