Ethical issue in a chapter 13
Posted: Sun Feb 24, 2013 5:55 pm
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.