Thank you for your reply.
The mortgage debt is in the name of the non filing spouse do to a refinance
(it is still community debt and paid out of community income). The property
is titled still as community property and both spouses live in it. Let's
assume the case is now characterized as consumer. The Debtor passed the
means test with the Real Property. The trustee is saying that he cannot
take it, since the loan is now in the wife's name - That has to be dead
wrong.
No offense to David Hagen, that is how I differentiate him from David Hagen
of Merrit and Hagen (and I know Larry has not been with the firm for years).
Henry M. Toles, J.D., M.B.A.
Henry M. Toles, A Law Corporation
11746 Goshen Avenue, No. 1
Los Angeles, California 90049-6113
Telephone: (310) 479-1400
Facsimile: (310) 575-0343
E-Mail:
hmt@toles.org
Member National Association of Consumer Bankruptcy Attorneys (NACBA)
We are a federally designated Debt Relief Agency under the United States
Bankruptcy Laws. We assist people with finding solutions to their debt
problems, including, where appropriate, assisting them with the filing
of petitions for relief under the United States Bankruptcy Code.
This does not constitute an electronic signature.
This message contains confiidential information which may also be
privileged. Unless you are the intended recipient (or authorized to receive
for the intended recipient) you may not copy, use or distribute the
information contained in this message.
-----Original Message-----
Mark JM
Sent: Friday, January 18, 2008 15:51
To:
cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Means Test - 341(a) Hearing / Business Case
My comments, for what they're worth, in bold below:
----- Original Message -----
To:
Sent: Thursday, January 17, 2008 7:10 PM
Subject: [cdcbaa] Means Test - 341(a) Hearing / Business Case
> Today I had a 341(a) on a very complex case. The case maybe challenged
and
> maybe won't, but I want to share with you my experience and ask for
input
> (Santa Ana case) Trustee is in my Inn of Court Group, but has never
shown
> up, so I will leave name off.
>
> FACTS: Client was a 49% owner of a mortgage lending company (CA "C").
The
> 51% owner headed for the hills and no one knows where he is. Both were
> guarantors on business lines, premises lease, etc. Client is married
with
> no children. None of the Debt belongs to his spouse. Client and his
wife
> own a condo, wife is on the loans due to refinancing issues and both are
on
> title. Client has a expensive leased car (which he is surrendering).
It is
> in his name only. Wife has a leased car, it is in her name only. They
file
> separate tax returns and she is currently disabled (but worked last
year).
> Client is 20% owner of two closely held corporations (restricted stock).
> Client has lots of taxes both dischargeable and non dischargeable. He
has
> only one active consumer credit card with $2,000 due. Client is sued by
> holder of business lines. His partner is named, but try and find him,
so
> creditors concentrate on Client. Client files cross complaint against
> partner for indemnification, but cannot be served.
>
> Those of you who know my work are aware that I am a documentation and
> footnote loon.
>
> PETITION: Since it is business debt and taxes, I really do not need a
means
> test. I do one anyway and write on the top, not required, business
case, no
> consumer debt, per 707, etc (Standard Language). He passes means test,
> because I used mortgage payments, taxes, etc on line 42. On Schedule A
I
> list condo, value, fact that loans are in wife's name, list lenders,
amounts
> due and explain since wife's debt I am not listing it on Schedule "D".
> Schedule "B" is so accurate and complete it is disgusting. All
businesses
> listed as well as wife's car and pension plan, bank accounts, etc. Also
I
> list I am not listing her vehicle on "D" since it is in her name (still
> listing lender and amount on "B" as a footnote. "I" and "J" are
accurate
> and I have listed wife's income. Same with Statement of Affairs. I
listed
> as co-debtors on all the business debt the corporation and the 51%
partner
> on Schedule "H". I also provided both the Debtor and his non filing
spouses
> tax returns (they file separately).
>
> HEARING: Trustee had not read the petition and it was filed as an
emergency
> to stop summary judgment hearing. I lend him hard copies. He is all
over
> my guy, but polite. He starts with why did you not list mortgage on
> schedule "D". I point him to footnote on "A" and explain why (not in
his
> name). He does same with wife's car. He looks at "F" and asks about
taxes
> and then looks right at my guy and says, "Sir, are you cherry picking
the
> creditors and only listing what you want" (he wasn't and said I listed
them
> all except the one small creditor I forgot). Trustee asks me for the
means
> test (Remember this is a business case). I hand it to him. Trustee
looks
> at line 42 and states, how can you list the mortgage expense when it is
in
> wife's name? I tell him (1) Means Test is not required in Business
Cases,
> and (2) Wife's income is listed, how can you exclude her expenses, the
live
> together and the IRS guidelines are for the family. He asks me if I
have
> given this information to the US Trustee. I said, the have copies of
the
> schedules and have chosen not to be here. He said, it is my duty to
report
> this to the US Trustee. Additionally, I want the Debtor's credit report
(I
> suspect he did not believe he did not other credit cards that were
consumer
> in nature). The case was continued to the end of the month to bring the
> credit report and give the US Trustee the chance to challenge the means
test
> and the case. No choice, back to Santa Ana.
>
> CREDIT REPORT: There is only the one credit card and the leased car
(just
> reviewed it).
>
> QUESTIONS FOR THE GROUP:
>
> 1). Let's assume the mortgage goes back into the case, does that change
the
> fact that it is a business case? Why would a means test be required?
The mortgage debt on a principal residence is consumer debt,
so to the extent that it is more than 50% of the non-consumer debt, then
yes.
>
> 2). Let's assume arguendo that there must be a means test. How can we
be
> required to list all joint income, granny's income, etc., and not be
able to
> take out marital expenses (Community Property condo, but wife is now on
loan
> and it is paid with community funds). Why would that legitimate expense
not
> be allowed?
Trustee is dead wrong on this one. It would be
nonsensical (even under BARF) to require income of both, but not the
expenses of both. Besides, if you're talking about the debt obligation on
the real property, that is owed 100% by each of them (joint and several),
right?
>
> 3). I could take a jump on this and write or call the US Trustee and
give
> them my take on this before the continued hearing.
> My concern is, who knows what the trustee will really do and do I lead
them
> into an area they would not look out. It could be is dangerous as
helpful
> (remember the OUST has not asked for anything and has all the
documents).
> What is the thoughts here from the group? What would you do here?
Why do you have a duty to report something you filed alread to the
USTO? That's nonsense. If the Ch. 7 Trustee has a problem, he owns a
telephone I'm sure.
>
> I find this matter very troubling. David Hagen (Hagen & Hagen) was
there
> and he could not believe it. I just think the Trustee has a problem
with my
> guy and the amount of income he makes, even thought it is spent for
living
> and is not outrageous.
Your first problem is that David Hagen hasn't been with Hagen
& Hagen for years.
______________________
Mark J. Markus
Law Office of Mark J. Markus
11684 Ventura Blvd. PMB #403
Studio City, CA 91604-2652
(818)509-1173 (818)509-1460 (fax)
web:
http://www.bklaw.com/
This Firm is a Qualified Federal Debt Relief Agency
___________
NOTICE: This Electronic Message contains information from the law office
of Mark J. Markus that may be privileged. The information is intended for
the use of the addressee only. If you are not the addressee, note that any
disclosure, copy, distribution or use of the contents of this message is
prohibited.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by
the IRS, we inform you that any U.S. tax advice contained in this
communication (or in any attachment) is not intended or written to be used,
and cannot be used, for the purpose of (i) avoiding penalties under the
Internal Revenue Code or (ii) promoting, marketing or recommending to
another party any transaction or matter addressed in this communication (or
in any attachment).
>
Thank
you for your reply.
The
mortgage debt is in the name of the non filing spouse do to a refinance (it is
still community debt and paid out of community income). The property is
titled still as community property and both spouses live in it. Let'sassume the case is now characterized as consumer. The Debtor passed the
means test with the Real Property. The trustee is saying that he cannot
take it, since the loan is now in the wife's name - That has to be dead
wrong.
No
offense to David Hagen, that is how I differentiate him from David Hagen ofMerrit and Hagen (and I know Larry has not been with the firm for
years).
Henry M. Toles, J.D., M.B.A.Henry M. Toles, A Law
Corporation11746 Goshen Avenue, No. 1Los Angeles, California
90049-6113Telephone: (310) 479-1400Facsimile: (310) 575-0343E-Mail:
hmt@toles.orgMember National Association of Consumer Bankruptcy
Attorneys (NACBA)We are a federally designated Debt Relief Agency under
the United StatesBankruptcy Laws. We assist people with finding solutions to
their debtproblems, including, where appropriate, assisting them with the
filingof petitions for relief under the United States Bankruptcy
Code.This does not constitute an electronic signature.Thismessage contains confiidential information which may also be privileged. Unless
you are the intended recipient (or authorized to receive for the intended
recipient) you may not copy, use or distribute the information contained in this
message.
-----Original Message-----From:
cdcbaa@yahoogroups.com
[mailto:
cdcbaa@yahoogroups.com]On Behalf Of Mark JMSent:
Friday, January 18, 2008 15:51To:
cdcbaa@yahoogroups.comSubject: Re: [cdcbaa] Means Test - 341(a)
Hearing / Business Case
My comments, for what they're worth, in
bold below:
----- Original Message -----
href"mailto:
hmt@toles.org">
hmt@toles.org>
To: <
cdcbaa@yahoogroups.com>
Sent: Thursday, January 17, 2008 7:10
PM
Subject: [cdcbaa] Means Test - 341(a) Hearing /
Business Case
> Today I had a 341(a) on a very complex
case. The case maybe challenged and> maybe won't, but I want to
share with you my experience and ask for input> (Santa Ana case)
Trustee is in my Inn of Court Group, but has never shown> up, so I will
leave name off.> > FACTS: Client was a 49% owner of a mortgage lending company (CA "C"). The> 51% owner headed for the
hills and no one knows where he is. Both were> guarantors on business lines, premises lease, etc. Client is married with> no
children. None of the Debt belongs to his spouse. Client and his
wife> own a condo, wife is on the loans due to refinancing issues and
both are on> title. Client has a expensive leased car (which he
is surrendering). It is> in his name only. Wife has a leased car, it is in her name only. They file> separate tax returns and she is currently disabled (but worked last year).> Client
is 20% owner of two closely held corporations (restricted stock).> Client has lots of taxes both dischargeable and non dischargeable. He
has> only one active consumer credit card with $2,000 due. Client
is sued by> holder of business lines. His partner is named, but
try and find him, so> creditors concentrate on Client. Client
files cross complaint against> partner for indemnification, but cannot
be served.> > Those of you who know my work are aware that I am
a documentation and> footnote loon.> > PETITION:
Since it is business debt and taxes, I really do not need a means> test. I do one anyway and write on the top, not required, business case,
no> consumer debt, per 707, etc (Standard Language). He passes
means test,> because I used mortgage payments, taxes, etc on line 42. On Schedule A I> list condo, value, fact that loans are in
wife's name, list lenders, amounts> due and explain since wife's debt I
am not listing it on Schedule "D".> Schedule "B" is so accurate and
complete it is disgusting. All businesses> listed as well as wife's car and pension plan, bank accounts, etc. Also I> list I
am not listing her vehicle on "D" since it is in her name (still> listing lender and amount on "B" as a footnote. "I" and "J" are
accurate> and I have listed wife's income. Same with Statement of
Affairs. I listed> as co-debtors on all the business debt the
corporation and the 51% partner> on Schedule "H". I also provided
both the Debtor and his non filing spouses> tax returns (they file separately).> > HEARING: Trustee had not read the petition and
it was filed as an emergency> to stop summary judgment hearing. I
lend him hard copies. He is all over> my guy, but polite.
He starts with why did you not list mortgage on> schedule "D". I
point him to footnote on "A" and explain why (not in his> name).
He does same with wife's car. He looks at "F" and asks about
taxes> and then looks right at my guy and says, "Sir, are you cherry
picking the> creditors and only listing what you want" (he wasn't
and said I listed them> all except the one small creditor I
forgot). Trustee asks me for the means> test (Remember this is a
business case). I hand it to him. Trustee looks> at line 42
and states, how can you list the mortgage expense when it is in> wife's
name? I tell him (1) Means Test is not required in Business
Cases,> and (2) Wife's income is listed, how can you exclude her
expenses, the live> together and the IRS guidelines are for the
family. He asks me if I have> given this information to the US
Trustee. I said, the have copies of the> schedules and have chosen not to be here. He said, it is my duty to report> this to
the US Trustee. Additionally, I want the Debtor's credit report
(I> suspect he did not believe he did not other credit cards that were
consumer> in nature). The case was continued to the end of the
month to bring the> credit report and give the US Trustee the chance to
challenge the means test> and the case. No choice, back to Santa
Ana.> > CREDIT REPORT: There is only the one credit card
and the leased car (just> reviewed it).> > QUESTIONS FOR
THE GROUP:> > 1). Let's assume the mortgage goes back into
the case, does that change the> fact that it is a business case?
Why would a means test be required?
The mortgage debt on a principal residence is consumer debt, so to the extent that it is more than 50% of the non-consumer debt, then
yes.> > 2). Let's assume arguendo that there must
be a means test. How can we be> required to list all joint
income, granny's income, etc., and not be able to> take out marital
expenses (Community Property condo, but wife is now on loan> and it is
paid with community funds). Why would that legitimate expense
not> be allowed?
Trustee is dead wrong on this one.
It would be nonsensical (even under BARF) to require income of both, but not
the expenses of both. Besides, if you're talking about the debt
obligation on the real property, that is owed 100% by each of them (joint and
several), right?
> > 3). I could take a jump on this and write or call
the US Trustee and give> them my take on this before the continued hearing.> My concern is, who knows what the trustee will really do and
do I lead them> into an area they would not look out. It could be
is dangerous as helpful> (remember the OUST has not asked for anything
and has all the documents).> What is the thoughts here from the
group? What would you do here?
Why do you have a duty to
report something you filed alread to the USTO? That's nonsense. If
the Ch. 7 Trustee has a problem, he owns a telephone I'm
sure.> > I find this matter very troubling. David
Hagen (Hagen & Hagen) was there> and he could not believe it.
I just think the Trustee has a problem with my> guy and the amount of
income he makes, even thought it is spent for living> and is not
outrageous.
Your
first problem is that David Hagen hasn't been with Hagen & Hagen for years.
______________________Mark J. MarkusLaw Office of Mark J.
Markus11684 Ventura Blvd. PMB #403Studio City, CA
91604-2652(818)509-1173 (818)509-1460 (fax)web:
http://www.bklaw.com/This Firm is a
Qualified Federal Debt Relief Agency___________NOTICE: This Electronic
Message contains information from the law office of Mark J. Markus that may be
privileged. The information is intended for the use of the addressee
only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the
IRS, we inform you that any U.S. tax advice contained in this communication
(or in any attachment) is not intended or written to be used, and cannot be
used, for the purpose of (i) avoiding penalties under the Internal Revenue
Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed in this communication (or in any
attachment).
>
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