Massachusetts law treats post-assessment, late-filed, tax returns as “abatement applications” and, therefore, any tax liability based on those documents is nondischargeable. Pendergast v. Mass. Dept. of Rev. (In re Pendergast), No. 13-32 and Wood v. Mass. Dept of Rev. (In re Wood), No. 13-058 (B.A.P. 1st Cir. May 2, 2014). [Read more…] about Tax Liability Nondischargeable Where Returns Filed Post-Assessment
Denial of Confirmation Not Final, Appealable, Order
Where the debtor is free to propose an amended plan, the First Circuit found that denial of confirmation is not a final, appealable, order. Bullard v. Hyde Park Savings Bank, No. 13-9009 (May 14, 2014). [Read more…] about Denial of Confirmation Not Final, Appealable, Order
Undistributed Funds Returned to Debtor upon Dismissal
When a chapter 13 case is dismissed, funds held by the trustee must be returned to the debtor. So said the district court in Williams v. Marshall (In re Williams), No. 13-2326 (N.D. Ill. Apr. 11, 2014). [Read more…] about Undistributed Funds Returned to Debtor upon Dismissal
Shortening Plan Duration without Decreasing Payment Amount Constitutes Modification
A proposed change to a confirmed chapter 13 plan that would pay creditors the same amount owed through the confirmed plan over a shorter period of time constitutes a “modification” to which section 1329 applies. In re Refosco, No. 13-cv-01219 (W.D. Pa. April 9, 2014). [Read more…] about Shortening Plan Duration without Decreasing Payment Amount Constitutes Modification
No Older Vehicle Expense Deduction for Above-Median Debtors
An above-median debtor may not take the older vehicle expense deduction of $200.00 when calculating his projected disposable income. In re Luedtke, No. 13-1313 (B.A.P. 9th Cir. April 9, 2014). [Read more…] about No Older Vehicle Expense Deduction for Above-Median Debtors
Projected Disposable Income Begins with Means Test
When calculating known or virtually certain changes to income or expenses, the starting point is the monthly income as shown on the means test rather than Schedules I and J. Kramer v. Bankowski (In re Kramer), No. 13-37 (B.A.P. 1st Cir. March 3, 2014). [Read more…] about Projected Disposable Income Begins with Means Test
Ninth Circuit Permits Award of Appeal Fees
The Ninth Circuit has cracked open a door that Sternberg seemed to have slammed shut by holding that a debtor is not precluded from recovering, as damages, attorneys’ fees for defending against a creditor’s appeal of a finding that the creditor violated the automatic stay. America’s Servicing Co. v. Schwartz-Tallard, No. 12-60052 (9th Cir. Apr. 16, 2014). [Read more…] about Ninth Circuit Permits Award of Appeal Fees
No Jurisdiction over TILA Claim Post-Discharge
Once the trustee abandoned the real property and the debtor was discharged from her chapter 7 case, the court declined to exercise jurisdiction over the pending adversary proceeding involving Truth in Lending Act claims. Bank of Amer. v. Travers, No. 11-12650, A.P. No. 11-1047 (Bankr. D. R.I. March 25, 2014). [Read more…] about No Jurisdiction over TILA Claim Post-Discharge
Four Late-Return Tax Cases Before First Circuit–How Will McCoy Fare?
In the most recent case to find its way to the First Circuit Court of Appeals, the BAP rejected McCoy and found that there is no per se rule that a late-filed tax return can only be a “return” for bankruptcy discharge purposes if it is filed by the IRS under the “safe harbor” provision of IRC § 1060(a). Brown v. Mass. Dept. of Rev., No. 13-27 (B.A.P. 1st Cir. April 3, 2014). There, the debtor argued that Massachusetts law “permits a taxpayer, once notified by the commissioner of its failure to file a return, to still file a proper return within 30 days before a tax will be assessed.” Where the debtor complied with all elements of a return as required by state filing laws, the fact that the return itself was filed late, did not change the fundamental nature of the document. Relying on its reasoning in Gonzalez v. Mass. Dept. of Rev., 2014 WL 888460, (March 6, 2014), the Bankruptcy Appellate Panel agreed. The panel found that the bankruptcy court had correctly rejected the “draconian” rule set forth in McCoy v. Miss. State Tax Comm’n, 666 F.3d 924 (5th Cir. 2012). In Gonzalez the court noted that section 523(a)(1)(B)(ii) makes specific provision for nondischargeability of tax returns filed both late and within two years of bankruptcy. Therefore, it found that untimeliness of filing alone was not intended to preclude discharge of tax liabilities.
The MDOC has filed an appeal to the First Circuit, No. 14-9003, where it will join three other cases: In re Perkins, No. 14-1350; In re Fahey, No. 14-1328 (both adopting McCoy); and In re Gonzalez, No. 14-9002 (rejecting McCoy).
Replacement Value Governs Value of Surrendered Vehicle
Under section 506(a)(2), replacement value rather than foreclosure value is the proper measure of property securing an allowed claim where the debtor plans to surrender the property under section 1325(a)(5)(C). Santander Consumer USA v. Brown, No. 13-13013, — F.3d —-, 2014 WL 1245266 (11th Cir. March 27, 2014). [Read more…] about Replacement Value Governs Value of Surrendered Vehicle