All posts in Chapter 7

Here comes the split re: trustee reach back for 10 years!

The circuit split starts!  Following up on my post below, this 10 year reach-back period for trustees is starting to garner some traction!  Judge Pappas, one of the nicest and astute judges I have met, recently issued an extremely thorough 76-page opinion siding with the Florida bankruptcy judge that allowed the trustee to step in the shoes of the IRS and reach back much farther than the 4-year limitation to avoid a fraudulent transfer.

I love it when courts cite nullum tempus occurrit regi meaning “no time runs against the king” (gives me goosebumps) which implies that the United States (i.e. IRS) is not bound by state statutes of limitation in enforcing its rights.

Read more…

Trustee Allowed to Reach Back 10 Years to Avoid a Fraudulent Transfer

Mr. Faucher’s post below re: 10 year clock on IRS debt reminded me of a case wherein a trustee was allowed to reach back 10 years (yes, 10!) to avoid a fraudulent transfer.  How far back is 10 years?  Obama was a junior senator.   A link to my original article published in the Law Journal Newsletter can be found by clicking here. Enjoy!

Nice Tentative from Judge Houle on Converting Case from Chapter 7 to Chapter 13 Postdischarge

BACKGROUND
On February 28, 2013, Michael & Maricar Santos (“Debtors”) filed a Chapter 7 voluntary petition.  On June 17, 2013, Debtors received a standard discharge.  The Chapter 7 case, however, remained open.

On October 4, 2016, Debtors filed a motion to convert case from Chapter 7 to 13.  On October 12, 2016, Trustee filed his opposition.  On November 2, 2016, Debtors filed a reply.  A hearing on the matter was held on November 9, 2016.  The hearing was continued to allow for additional briefing on the issue whether, and in what circumstances, a Chapter 7 case could be converted to a Chapter 13 post-discharge.  Debtor filed their response on November 18, 2016.  Trustee filed their response on November 29, 2016. Read more…

Case Brief – In re Diaz, a different view of the homestead exemption

The Diaz case (In re Diaz, 547 B.R. 329, 9th Cir. BAP), has not received enough love but I find it to be too fascinating not to write about because of its potential for so much advantage!

There were essentially two holdings in the case:

  1. The California homestead exemption contains a “residence” requirement which includes an “intent” component; and
  2. The burden is on the Debtor to prove intent.

The intent component of the residence requirement requires that debtors have a bona fide intention to make the premises their home or residence.

Read more…

FBA Program on Unbundling and Limited Scope Representation

I had a great time on Friday doing a program for the Federal Bar Assn with Judge Sandra Klein.  We tried to summarize the various code sections and rules that circumscribe unbundling and limited scope representation, at least in the central district.   The point was to show that there are really not very many black-letter rules. The point also is that attys may enter into agreements with persons which limit the efforts the atty will make on behalf of the person – subject to only a few rules.

I will summarize the rules.  It helps me get it clear in my head.

United State Constitution – nothing (tongue firmly in cheek). Read more…

Volunteers Needed for Reaffs Tomorrow in Woodland Hills

Email from Maggie Bordeaux:

Hi everyone,

We still need volunteers for the reaffirmation hearings scheduled for tomorrow morning, 11/15 at: Read more…

San Diego Chapter 7 RARA – I like it

I will probably get pitched out of the consumer bar for saying this but I like the San Diego Chapter 7 RARA.  You can access the form here.  The form would make a nice retainer agreement.  Most of the body of the form is below. Read more…

Judge Scott Clarkson Refers Matter to Office of the Inspector General and Executive Office of the US Trustee

Judge Scott Clarkson has entered an Order entitled (in part)  ORDER (1) REFERRING MATTER TO (a) THE OFFICE OF THE INSPECTOR GENERAL FOR THE DEPARTMENT OF JUSTICE AND (b) THE EXECUTIVE OFFICE OF THE UNITED STATES TRUSTEE in the matter of In re Cherrett, Case No. 6:13-bk-24792-SC.  The Order states (in part) as follows:

“In the end, the process of administration of this estate, and the delay of consideration of closing of this estate by the Court, may have been improperly inhibited.  It was not the role of the U.S. Trustee, which is not a party to the appeal, to provide a de facto stay pending appeal.  By its affirmative actions, the U.S. Trustee may have intentionally favored one party to the possible detriment of another party, which if true, this Court finds unjustified and offensive.

Based upon the record as a whole and for the reasons set forth on the record,

IT IS ORDERED AS FOLLOWS:

1. The Court hereby refers this matter to the Office of the Inspector General for the Department of Justice (“OIG”) for the purpose of investigating any and all matters discussed at length during the September 13, 2016 hearing and as set forth in the Court’s Order. This referral includes a request that the OIG investigate and determine whether the U.S. Trustee behaved improperly or engaged in any impropriety with respect to the U.S. Trustee’s influence with the Chapter 7 Trustee resulting in the withdrawal of the Trustee’s Final Report. The Court refers this matter to the OIG for any appropriate actions, as deemed appropriate by the OIG after a full review. The Court further refers this matter to the Executive Office of the United States Trustee for whatever internal actions it may desire to take.
2. The bankruptcy court shall request and pay for a hearing transcript of the September 13, 2016 hearing, which is to be prepared on a non-expedited basis.

Download Clarkson’s Cherrett Order

Renewal of Judgment Requires Recording of Application for Renewal for Survival of Judgment Lien – Pete Steinberg

From Pete Steinberg:

As you may be aware from my prior emails, my firm and I handle Plaintiff litigation arising from bankruptcy malpractice, and, like you, I am also on the Bankruptcy Mediation Panel. Read more…

Husky v. Ritz – the Supreme Court Really Needs Some Bankruptcy Basics

I get calls all the time from people who say that so and so owes them money and just filed bankruptcy.  I ask, “Did the debtor lie and cheat and steal when you loaned him the money or sold him the goods?”  No – well then I would take your files and pitch them in the ocean.  You are out of luck.  The debtor gets his fresh start.

Now I can say, “any chance the debtor hid some assets or transferred something he owned to some relative?”  If so, the Supreme Court says that MIGHT form the basis for declaring the debt to you to be non dischargeable.  If the debtor really did that I usually tell the client, we can ask the court to deny his discharge altogether under section 727 but then you are in line with all other creditors whose debts are likewise not discharged.  But now we can go after the debtor alone under 523(a)(2) and have the debt discharged only as to us, not everyone else.    The Supreme Court really had no idea of this.   Read more…