Effect of out of state statute on dischargeability
Posted: Tue Jul 19, 2016 12:33 pm
9th Circuit will apply ND law to determine what kind of liability the debt is - excise tax, wages, etc. Then it will apply federal law to determine whether it's dischargeable. 8th Circuit rulings will be persuasive but not precedential.John D. Faucher818/889-8080
On Monday, July 18, 2016 11:16 PM, "pnnzegge@yahoo.com [cdcbaa]" wrote:
I will get your file ready for filing. We can always convert your case to chapter 13 if we can't do this in Chapter 7. Call me tomorrow to schedule when u can meet.
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On Jul 18, 2016, at 7:11 PM, Holly Roark hollyroark22@gmail.com [cdcbaa] wrote:
A North Dakota state statute (8th Circuit) says "The personal liability of any person as provided in this section survives dissolution,reorganization, bankruptcy, receivership, or assignment for the benefit of creditors. For the purposes of this section, all wages paid by the corporation or limited liability company must be considered earned from any person determined to be personally liable."
The 8th Circuit has held such debts subject to this statute (such as work comp insurance premiums) to be nondischargeable under this statute as "excise taxes".
The 9th Circuit holds the opposite with respect to such work comp premium debts and does not hold them to be "excise taxes" or nondischargeable.
If a Debtor living in the 9th Circuit incurs such a debt in the 8th Circuit because they have a business there (work comp premiums), will the 9th Circuit bk court apply the ND statute and find the debt nondischargeable in accord with the 8th Circuit's interpretation? Or will they apply their own rules? Does BK law in the 9th Circuit preempt this state statute? Is there such thing as an "ipso facto statute" that is unenforceable in bankruptcy?
Holly RoarkCertified Bankruptcy Specialist*
and Sports Lawyer
holly@roarklawoffices.com**primary email address**www.roarklawoffices.comCentral District of California & District of Idaho - Consumer Bankruptcy Attorney1875 Century Park East, Suite 600 Los Angeles, CA 90067T (310) 553-2600; F (310) 553-2601*By State Bar of California Board of LegalSpecialization
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