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Ethical issue in a chapter 13
Hello Dennis: Thanks for the answer.
We reported the lawsuit as worth "unknown."
Later, we amended Schedule C to exempt $22,075 under 703.
It's for personal injury, and won't show up on the tax return.
I think at this point, I have a duty to report to the trustee that the
debtor got $50,000 of income that's not reported on the tax return. I'm
anticipating doing that by writing a single sentence on a single sheet of
paper that is sent in the same envelope as the tax return.
John D. Faucher
Faucher & Associates
*818/889-8080*
On Sun, Feb 24, 2013 at 4:32 PM, Dennis McG wrote:
> **
>
>
> John:
>
> It depends how you wrote the plan. If you disclosed in the skds the value
> of the asset was a range, or at least $x, and no one objected to your
> valuation, and the court confirmed a pot plan, then I would say no, there
> is not duty to report. However, it will show up on the tax return and the
> trustee may demand a higher payment anyway.
>
> If you undervalued the asset, the court could find the plan was confirmed
> by fraud if you don't report the settlement to the trustee.
>
> I would write to the debtor, explain why you think there may be a problem
> and get the debtor to tell you to report the settlement to the trustee to
> protect the debtor's discharge. If you can accomplish this, you won't have
> a conflict.
>
> d
>
>
>
> On Thu, Feb 21, 2013 at 3:32 PM, John D. Faucher j.d.faucher@sbcglobal.net> wrote:
>
>> **
>>
>>
>> My chapter 13 client filed his petition two years ago reporting a
>> potential settlement from a lawsuit on Schedule B as worth $20,000. Plan
>> is confirmed. The lawsuit just settled and paid him $50,000. Confirmation
>> order says nothing about the value of assets.
>> Question: do I have any duty to report the actual value of the
>> settlement? I think that would look like amending Schedule B.
>> Alternatively, do I have a duty not to offer information about this, as
>> it would be against the debtor's interest and it's up to the trustee now to
>> determine if she wants to increase plan payments?
>> Reporting the value of the settlement would probably also entail amending
>> schedule C to change the exemption scheme; the net result would be an
>> increase in plan payments of about $2,500 over the life of the plan.
>>
>> John D. Faucher
>> Faucher & Associates
>> *818/889-8080*
>>
>>
>
>
Hello Dennis: Thanks for the answer.
The post was migrated from Yahoo.
John:
It depends how you wrote the plan. If you disclosed in the skds the value
of the asset was a range, or at least $x, and no one objected to your
valuation, and the court confirmed a pot plan, then I would say no, there
is not duty to report. However, it will show up on the tax return and the
trustee may demand a higher payment anyway.
If you undervalued the asset, the court could find the plan was confirmed
by fraud if you don't report the settlement to the trustee.
I would write to the debtor, explain why you think there may be a problem
and get the debtor to tell you to report the settlement to the trustee to
protect the debtor's discharge. If you can accomplish this, you won't have
a conflict.
d
On Thu, Feb 21, 2013 at 3:32 PM, John D. Faucher
wrote:
> **
>
>
> My chapter 13 client filed his petition two years ago reporting a
> potential settlement from a lawsuit on Schedule B as worth $20,000. Plan
> is confirmed. The lawsuit just settled and paid him $50,000. Confirmation
> order says nothing about the value of assets.
> Question: do I have any duty to report the actual value of the settlement?
> I think that would look like amending Schedule B. Alternatively, do I
> have a duty not to offer information about this, as it would be against the
> debtor's interest and it's up to the trustee now to determine if she wants
> to increase plan payments?
> Reporting the value of the settlement would probably also entail amending
> schedule C to change the exemption scheme; the net result would be an
> increase in plan payments of about $2,500 over the life of the plan.
>
> John D. Faucher
> Faucher & Associates
> *818/889-8080*
>
>
>
John:It depends how you wrote the plan. If you disclosed in the skds the value of the asset was a range, or at least $x, and no one objected to your valuation, and the court confirmed a pot plan, then I would say no, there is not duty to report. However, it will show up on the tax return and the trustee may demand a higher payment anyway.
If you undervalued the asset, the court could find the plan was confirmed by fraud if you don't report the settlement to the trustee.I would write to the debtor, explain why you think there may be a problem and get the debtor to tell you to report the settlement to the trustee to protect the debtor's discharge. If you can accomplish this, you won't have a conflict.
dOn Thu, Feb 21, 2013 at 3:32 PM, John D. Faucher <j.d.faucher@sbcglobal.net> wrote:
My chapter 13 client filed his petition two years ago reporting a potential settlement from a lawsuit on Schedule B as worth $20,000. Plan is confirmed. The lawsuit just settled and paid him $50,000. Confirmation order says nothing about the value of assets.
Question: do I have any duty to report the actual value of the settlement? I think that would look like amending Schedule B. Alternatively, do I have a duty not to offer information about this, as it
The post was migrated from Yahoo.
My chapter 13 client filed his petition two years ago reporting a potential
settlement from a lawsuit on Schedule B as worth $20,000. Plan is
confirmed. The lawsuit just settled and paid him $50,000. Confirmation
order says nothing about the value of assets.
Question: do I have any duty to report the actual value of the settlement?
I think that would look like amending Schedule B. Alternatively, do I
have a duty not to offer information about this, as it would be against the
debtor's interest and it's up to the trustee now to determine if she wants
to increase plan payments?
Reporting the value of the settlement would probably also entail amending
schedule C to change the exemption scheme; the net result would be an
increase in plan payments of about $2,500 over the life of the plan.
John D. Faucher
Faucher & Associates
*818/889-8080*
My chapter 13 client filed his petition two years ago reporting a potential settlement from a lawsuit on Schedule B as worth $20,000. Plan is confirmed. The lawsuit just settled and paid him $50,000. Confirmation order says nothing about the value of assets.
Question: do I have any duty to report the actual value of the settlement? I think that would look like amending Schedule B. Alternatively, do I have a duty not to offer information about this, as it
The post was migrated from Yahoo.