Central District Consumer Bankruptcy Attorney's Association

Yes, under 348(d) it's the date of conversion.
I don't claim to know much if anything about taxes but I would be careful
with this. For example 28 USC 108(d)(2) says:
(2) Title 11 case
For purposes of this section, the term title 11 case means a case under
title 11 of the United States Code (relating to bankruptcy), but only if
the taxpayer is under the jurisdiction of the court in such case and *the
discharge of indebtedness is granted by the court* or is *pursuant to a
plan* approved by the court.
So if the bank willy nilly forgives the debt, then does the bankruptcy
really discharge that COD income? I don't know.
Sincerely,
Michael Avanesian
Law Offices of David A. Tilem
www.tilemlaw.com
818-507-6000
On Fri, Nov 7, 2014 at 6:32 AM, R Grace Rodriguez rgracelaw@gmail.com
[cdcbaa] wrote:
>
>
> I have had this situation come up as well. Isn't the debt pre-petition
> for which the discharge will apply to said debt regardless of whether they
> forgive it or not, regardless of whether they issue a 1099.
>
> My clients have been filing tax returns at the advice of their accountants
> when they have received 1099's for this debt forgiveness in a pending
> Chapter 13, reporting it as debt which "has been discharged in bankruptcy"
> in anticipation they will complete their plan if it continues to be
> necessary to remain in the Chapter 13 after the forgiveness on the 2nd.
> The IRS hasn't challenged any of these situations yet and there have been
> three of those. I realize they are taking a risk if the IRS challenges it
> but I know that's a risk.
>
> The alternative is to convert to a Chapter 7 if they qualify (i.e. income
> has gone down). I'm probably wrong but isn't it that the date of
> conversion delineates what is pre and post petition debt? If I am right
> then that would take care of the 1099 issue.
>
> By the way. . . GREAT TO SEE ALL OF Y'ALLS at the dinner last night!
>
>
>
> R. Grace Rodriguez, Esq.
> OFF: (818) 734-7223
> CEL: (818) 554-9922
>
>
>
>
Yes, under 348(d) it's the date of conversion.I don't claim to know much if anything about taxes but I would be careful with this. For example 28 USC 108(d)(2) says:(2) Title 11 caseFor purposes of this section, the term title 11 case means a case under title 11 of the United States Code (relating to bankruptcy), but only if the taxpayer is under the jurisdiction of the court in such case and the discharge of indebtedness is granted by the court or is pursuant to a plan approved by the court.So if the bank willy nilly forgives the debt, then does the bankruptcy really discharge that COD income? I don't know.Law Offices of David A. Tilemwww.tilemlaw.com818-507-6000
On Fri, Nov 7, 2014 at 6:32 AM, R Grace Rodriguez rgracelaw@gmail.com [cdcbaa] <
The post was migrated from Yahoo.

I have had this situation come up as well. Isn't the debt pre-petition for
which the discharge will apply to said debt regardless of whether they
forgive it or not, regardless of whether they issue a 1099.
My clients have been filing tax returns at the advice of their accountants
when they have received 1099's for this debt forgiveness in a pending
Chapter 13, reporting it as debt which "has been discharged in bankruptcy"
in anticipation they will complete their plan if it continues to be
necessary to remain in the Chapter 13 after the forgiveness on the 2nd.
The IRS hasn't challenged any of these situations yet and there have been
three of those. I realize they are taking a risk if the IRS challenges it
but I know that's a risk.
The alternative is to convert to a Chapter 7 if they qualify (i.e. income
has gone down). I'm probably wrong but isn't it that the date of
conversion delineates what is pre and post petition debt? If I am right
then that would take care of the 1099 issue.
By the way. . . GREAT TO SEE ALL OF Y'ALLS at the dinner last night!
R. Grace Rodriguez, Esq.
OFF: (818) 734-7223
CEL: (818) 554-9922
I have had this situation come up as well. Isn't the debt pre-petition for which the discharge will apply to said debt regardless of whether they forgive it or not, regardless of whether they issue a 1099. My clients have been filing tax returns at the advice of their accountants when they have received 1099's for this debt forgiveness in a pending Chapter 13, reporting it as debt which "has been discharged in bankruptcy" in anticipation they will complete their plan if it continues to be necessary to remain in the Chapter 13 after the forgiveness on the 2nd. The IRS hasn't challenged any of these situations yet and there have been three of those. I realize they are taking a risk if the IRS challenges it but I know that's a risk. The alternative is to convert to a Chapter 7 if they qualify (i.e. income has gone down). I'm probably wrong but isn't it that the date of conversion delineates what is pre and post petition debt? If I am right then that would take care of the 1099 issue.By the way. . . GREAT TO SEE ALL OF Y'ALLS at the dinner last night!R. Grace Rodriguez, Esq.OFF: (818) 734-7223CEL: (818) 554-9922

The post was migrated from Yahoo.

I have had a couple over the last two years as well.
On Nov 6, 2014 12:43 PM, "'Peter M. Lively' petermlively2000@yahoo.com
[cdcbaa]" wrote:
>
>
> One of my clients just received a similar letter. I believe it is part of
> the lender's settlement with the federal government and I suspect it is
> discretionary with the lender which debtors receive loan waivers, but I'm
> not sure.
>
> I'm considering challenging the release because the debtor already avoided
> the lien and is likely to finish the plan.
>
> I don't want my client to end up with COD income and resulting tax
> liability if he isn't eligible for the IRC 108 balance sheet insolvency
> exception due to retirement savings. My understanding is that the 1099c is
> issued during the tax year of the transaction (waiver), so that the IRC 108
> exception for title 11 cases will not apply unless the bankruptcy discharge
> happens in the same year.
>
> Peter M. Lively, J.D., M.B.A.
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
> Telephone: (310) 391-2400 * Toll Free: (800) 307-3328 * Fax: (310)
> 391-2462
>
>
> On Thursday, November 6, 2014 10:24 AM, "Jim Selth jim@wsrlaw.net
> [cdcbaa]" wrote:
>
>
>
> In the past week, I have had two junior lienholders voluntarily release
> their lien in a pending Chapter 13 case.
>
> In one case in which the Motion to Avoid Lien had been granted but the
> Debtor has 3 more years to go on his Plan, Chase wrote a letter to the
> Debtor (and copied me) saying that Were releasing the lien on your
> property. You dont need to sign or return anything to us.> Chase and they said that a Reconveyance of Deed of Trust will be recorded,
> but they will still retain their unsecured claim in the Chapter 13 case.
>
> In the other case, I had recently substituted into a 2012 Chapter 13 case
> filed by our late colleague John Greifendorff. He had stated in the
> Debtors Plan that the junior lien of Wells Fargo would be avoided, but he
> never filed the Motion to Avoid Lien, and I was in the process of preparing
> it to file next week. Yesterday, a letter sent by Wells Fargo to the
> Chapter 13 Trustee was filed on the case docket as a Withdrawal of Claim.
> The letter states that We have evaluated the aforementioned account. Upon
> review of our records, a business decision has been made to release the
> lien and consider the account satisfied. Consequently, your office may
> consider this proof of claim for Wells Fargo Bank, N.A. as successor by
> merger to Wachovia Bank, N.A. effectively withdrawn. It was only a 1%
> Plan, but I assume the Trustee will not pay Wells Fargo anything as an
> unsecured creditor based on this letter.
>
> Several years ago around the time of the big settlement between the USA
> and the big mortgage lenders, I had at least half a dozen clients with
> underwater second TDs receive voluntary lien release/debt forgiveness
> letters, which I assumed was the lenders way of complying with the
> settlement requirements that they forgive a certain amount of mortgage debt
> by writing off these junior loans which had no (or little) equity anyway.
>
> Is anyone seeing these letters in their Chapter 13 cases? Does anyone
> know why this is happening now?
>
> Jim
>
> James R. Selth
> Certified Bankruptcy Specialist*
> Weintraub & Selth, APC
> 11766 Wilshire Boulevard, Suite 1170
> Los Angeles, California 90025
> Telephone: (310) 207-1494
> Facsimile: (310) 442-0660
> E-Mail: jim@wsrlaw.net
>
> *Certified by State Bar of California as Certified Legal Specialist in
> Bankruptcy Law
>
>
>
>
>
I have had a couple over the last two years as well.
On Nov 6, 2014 12:43 PM, "'Peter M. Lively' petermlively2000@yahoo.com [cdcbaa]" <cdcbaa@yahoogroups.com> wrote:

The post was migrated from Yahoo.