All posts in Chapter 13

Judge Zurzolo instructions for his November 16, 2020 chapter 13 hearings

Email from Keith Higgenbotham:

Dear Colleagues!

Judge Zurzolo has asked that attorneys appearing on his upcoming Ch13 Cf hearings for MONDAY, November 16th register their appearances with his chambers AS SOON AS POSSIBLE (now!) due to the number of matters on that calendar. Instructions for registration can be found below — including allowing you to register for more than 1 hearing in one email for ALL appearances for that day for that attorney.

As you may be aware, Judge Zurzolo was the first Judge to create a toll free appearance line so that we do not need to use CourtCall.  As a trade-off, we are REQUIRED to register your appearance(s) with his chambers beforehand using a new specific email address.

Since the Ch13 calendar has many matters on it, the Court is requiring all attorneys appearing on that calendar to begin registering NOW with Judge Zurzolo’s chambers, as is required.  Also, the Court is requiring ALL to register by NO LATER THAN 5:00 p.m. on Wednesday 11-11 — instead of the usual noon on the day prior to the hearing.

The Court has assisted us in posting the 11/16 calendar early and has been posted it on the Tentative Rulings page of the Court’s website with the following instructions (see below) on registering for appearances.

The Court is prepared to accept registrations beginning TODAY and strongly encourages it.  The Court asks that attorneys begin registering now and definitely no later than Wed 11/11. This will greatly assist Chambers in being prepared for the 11/16 calendar and NOT be deluged at the last minute.

NOVEMBER 16, 2020 CHAPTER 13 HEARINGS:

PLAN CONFIRMATION AND MISCELLANEOUS HEARINGS

Judge Zurzolo’s courtroom is CLOSED to the public until further notice.

Please refer to the home page of the court’s website for information on public access to the Roybal Building, including General Order 20-06 and Public Notice 20-009. All phone appearances are made on Judge Zurzolo’s toll-free line.

Keith Higginbotham Read more…

Failure to notify the FTB that the IRS “adjusted” your taxes, makes the tax debt non-dischargeable

Berkovich v. State of California Franchise Tax Board (In re Berkovich), — B.R. —, 2020 WL 5910033 (9th Cir. BAP  Oct, 2020)

Issue:   Is the required “report” which must be filed with the FTB after the IRS adjusts a taxpayer’s return a “return” such that failing to file it renders the tax debt non-dischargeable?

Holding:   Yes.

Judge Maureen Tighe, Central District of California

Standard of review.  “We review de novo the bankruptcy court’s decision to grant or deny summary judgment.”

Faris, Lafferty, Spraker

Opinion by Robert Faris

The debtor here filed his personal tax returns with the FTB but failed to notify the FTB of adjustments made by the IRS.  The debtor argued “that the reports required under RTC section 18622(a) are not ‘returns,’ so his failure to file them did not render his tax debts nondischargeable.  He is wrong.”  The bankruptcy court ruled that the taxes for those years were not discharged.

The BAP affirmed.  “The only question on appeal is whether the report required by RTC section 18622(a) that Mr. Berkovich failed to file is a ‘a return, or equivalent report or notice’ within the meaning of § 523(a)(1)(B).”  The BAP said it was based on the language of the RTC code section.

Note:  This was a chapter 13.  The debt was treated in the plan as unsecured i.e., dischargeable.  The plan was confirmed, completed five years later and after that the FTB filed an adversary asking the court to rule that the tax was not discharged.

Judge Zurzolo appearance instructions

Email from Keith Higginbotham

Dear Colleagues!

Judge Zurzolo has asked that attorneys appearing on his upcoming Ch13 Cf hrgs for MONDAY, September 14th register their appearances AS SOON AS POSSIBLE (now) due to the number of matters on that calendar.  Instructions for registration can be found on the calendar page for the tentatives for 9/14 (pages 1 & 2) and also on Judge Zurzolo’s webpage under “Telephonic Instructions”.

As you may be aware, Judge Zurzolo was the first Judge to create a tollfree appearance line so that we do not need to use CourtCall.  As a trade-off, we are REQUIRED to register your appearance(s) with his chambers beforehand using a new specific email address.

The Ch13 calendar for Monday, September 9/14 is now posted.  Instructions for making a telephonic appearance are also posted — including allowing you to register for more than 1 hearing in one email for ALL appearances for that day for that attorney.

The Court is prepared to accept registrations beginning TODAY and strongly encourages it.  The Court asks that attorneys begin registering now (at least for 9:00 and 10:30 hearings), and definitely no later than Wed 9/9.   That will help chambers be prepared and not deluged at the last minute.

As a reminder, Judge Zurzolo’s 9:00 a.m. and 10:15 a.m. hearings are listed on VZ webpage under “Chapter 13”.

The 10:30 a.m. hearings are posted under tentative rulings, and by Tues 9/8 the tentatives will be updated to identify hearings for which appearances are waived.

cdcbaa member

Keith Higginbotham

You know Legal and Equitable Rights, but have you heard of a Reversionary Right?

What happens when two spouses file two separate bankruptcy cases?  I will use Spouse 1 and Spouse 2 both to distinguish the spouses but also to establish the order of filing — first and second.  Spouse 1 files first followed by Spouse 2 later.

Do the community assets of Spouse 1 get included in Spouse 2′s bankruptcy case?  Not so says the Court in this published decision but Spouse 2 does have a “Reversionary Right” to those assets.

Here’s what happened in this published Chapter 13 Moreno case from Riverside.

Read more…

Watch out for Ford and reaff’s

This is from our consumer bankruptcy listserve, bankruptcy attys only, names have been withheld to protect the innocent.

Question (from consumer bk atty):  I filed a Chapter 7 for client.  Ford sent their letter saying to sign a reaffirmation agreement or they will repo the car.  Has anyone had Ford actually repo cars with no reaffirmation agreement?

Answer No. 1:  Yes…especially if they’re represented by Cooksey Toolen in Costa Mesa.

Answer No. 2:   Definitely. Watch out for Ford!

Comment from Hale Antico, President of our group:

I think the conventional wisdom is only Ford/Cooksey will go after a failure to reaffirm, but it’s still best practice to reaffirm, coupled with the next sentence. If the court disapproves it, we’re back to pre-BAPCPA ride-through. I know of no example of a repo after a court disapproval where debtor remained current.

Credit Unions won a reaff carve-out at 524(m)(2).

What is a “contingent” debt for chapter 13 eligibility purposes

I love this definition from a recent BAP case, Fountain v. Deutsche Bank National Trust Company (In re Fountain), — B.R. —  (9th Cir. BAP  Mar, 2020)

A debt is contingent when “the debtor will be called upon to pay [it] only upon the occurrence or happening of an extrinsic event which will trigger the liability of the debtor to the alleged creditor.” Fostvedt v. Dow (In re Fostvedt), 823 F.2d 305, 306 (9th Cir. 1987). If “all events giving rise to liability occurred prior to the filing of the bankruptcy petition,” the claim is not contingent. In re Nicholes, 184 B.R. at 88. A dispute over liability for a claim does not make the debt contingent. Id. at 89 (citing In re Dill, 30 B.R. 546, 549 (9th Cir. BAP 1983))

In my world, this comes up most often when an individual has guaranteed his business loans, i.e., corporate debts.  Is his personal obligation to the bank contingent?  Of course says I.  And the above quote supports that position.  The individual is called on to pay the debt only when the corporate entity has failed to pay it.  But in fairness, you have to read the words of the “guaranty.”  In commercial corporate guarantees, the ones I have read at least, the individual typically waives any rights he may have to require that the bank go after the corp first.  The guaranty is likely to say that the bank can ignore the actual borrower entirely and go after the individual if that’s what it chooses to do.   That may not be a contingent debt.

Summary of Chapter 13

This is a short and concise summary of chapter 13 in the Central District of California.  It is supported with code sections and case cites.  For a free pdf copy, click here - Summary of CH 13 final   A paperback version can be purchased on Amazon here.  I am always looking for comments.  Feel free to tell me what you think.

Chapter 13 Webinar featuring Cathy Moran

Another FREE Webinar in
The Academy’s Series
Prompted by COVID19 and The CARES Act

       
WEDNESDAY May 6th  
 1:00 eastern/12:00 central/11:00 mtn/10:00 pacific
 
As 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, debtor attorneys will be called on to guide clients forward, in one direction or another.  In this webinar, with a combined SEVENTY-NINE years of experience representing individual and small business debtors, Certified Specialists Cathy Moran and Jill Michaux will review questions you will need to answer in order to provide the sharpest analysis for your clients.  This webinar is Part 2 and will focus on conversion and hardship discharge. Part 1 looked primarily at modification.

This webinar is part 2 of a 2-part series on COVID-19 and its impact on Chapter 13s.
If you cannot attend the live presentation, the Academy will post a recording of the webinar at ConsiderChapter13.org - Access to the recording will be free to Academy subscribers – or we offer a pay per view option.
Not a Subscriber?  Click here 
  (Registration for this webinar automatically places registrant on the Academy’s email list)      

$608.34 for Fee Apps for Opposed Motions for Relief – thumbs down.

How much should you request in your fee application?  Judge Johnson, in a lengthy and researched opinion here, spent considerable time reviewing 168 fee applications to come up with a standard.

  • $140.69 for unopposed motions (i.e. car lender files MFR to sell vehicle in its possession).
  • $442.50 for limited/no opposition in fraudulently hijacked cases where debtor got partial interest (debtor has no interest in defeating the motion since the property is not theirs).
  • $608.34 for opposed motions for relief (requires opposition and appearance).

Fee applications require counsel to demonstrate why their fees are reasonable in light of the customary and standard practice of the consumer bar.  Confirms my position to never file a case in Riverside.

Stay safe and hope everyone is doing well.

Sevan Gorginian, Esq.

Chapter 13 info from Aki on tax refunds and economic relief payments

Post by Aki on Facebook:

*****IMPORTANT*****

There are two additional issues that our office has been requested to address which I now have answers for:

TAX REFUNDS

As the tax refund turnover requirement is mandated by the plan and the order confirming the plan, your client will need to file a motion to modify the plan (MOMOD) to suspend the turnover requirement for tax refunds from the 2019 tax year. The trustee does not have the legal authority to waive the tax refunds without a court order.

For the MOMOD, please indicate why your client needs to retain the tax refund. This will usually include evidence that your client’s income has been directly affected by employer actions taken to deal with the COVID-19 threat or business income being reduced due to loss of business directly related to COVID-19. Your client will not have to file the MOMOD immediately and please indicate in your motion if your client wants the relief Nunc Pro Tunc.

ECONOMIC RELIEF PAYMENTS

The Trustee will not be seeking a turn over of any economic relief payments related to the COVID-19 threat.