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Can Federal 1040 Income Taxes be Discharged in a Chapter 7 Bankruptcy in Michigan?

Michigan Bankruptcy and 1040 Income Taxes. Yes, provided the 5 following rules are met: 1.  The taxes at issued must be 1040 Income Taxes. Taxes such as payroll taxes, trust fund taxes, sales tax or fraud taxes are treated differently. 2.  The 3 Year Rule. The income tax return for which the taxes are owed must have been due at least 3 years before you file for bankruptcy – including any extensions. Generally, the due date is April 15 of the year the return is due. If an extension is filed, then the due date is extended to August 15 or October 15 of that year. For example, if a tax was due from a 2008 income tax return, the due date of that tax…

Scam Alert – Global Client Solutions & The World Law Group rip off Michigan couple!

Michigan Bankruptcy SCAM ALERT. I just retained a client who had been scammed by Global Client Solutions based out of Tulsa Oklahoma and The World Law Group based out of Austin Texas. These slick grifters convince people that they can eliminate all of your unsecured credit card debt in as little as 4 years. My new client bought in to this “hoo haa” and spent themselves broke trying to pay off their creditors while Global Client Solutions and The World Law Group raked in thousands of dollars and did nothing. The client ended up getting sued by their credit card companies – but not to worry (according to The World Law Group) – as they had agreed to provide all of the pleadings and other…

Bankruptcy in Michigan- What happens if you fail to include a creditor in your bankruptcy in Michigan filing?

Michigan Bankruptcy Failure to list Creditor. Any time you correct or add a creditor to your michigan bankruptcy matrix you want to send them a copy of the 341 notice. You will also need to amend your Schedules including the creditor and pay the appropriate fee and file the amended Schedules and Cover Sheet for Amendments. In addition, you want to send them a “Certificate of Service” showing that you did in fact mail them a copy of the notice.

Bankruptcy Michigan – What happens to the rent money when your rental property is foreclosed on in Michigan?

Michigan Bankruptcy and Rental Property Rent Money. After you file for bankruptcy in Michigan, the rents from your rental property become property of the estate. The trustee exercises full authority and control over those rent monies. The only way that the mortgage company can get control of the rents is to file a motion with the Bankruptcy court to enforce the rents and profits clause in their mortgage agreement. Once the order allowing the mortgage company to receive the rent monies, the rent is no longer property of the estate and the mortgage company is entitled to receive it.

North Carolina Bankruptcy Judge Denies Debtors’ Motion to Convert from Chapter 7 to Chapter 13 Due to Bad Faith

Michigan Bankruptcy and Chapter 7 to 13 Conversion. The Chapter 7 Debtors failed to disclose in their petition their interests in various real estate partnerships and multiple foreclosure proceedings, which the Chapter 7 Trustee discovered through reviewing the Debtors’ tax return and public records.  The Debtors then sought to convert to Chapter 13 and the Chapter 7 Trustee objected. The Court held the Debtors  initial schedules were so misleading as to give rise to an inference  of bad faith, which in turn prevents conversion. Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007).  The debtors argued that providing the 2009 tax return, which disclosed some of the missing items, demonstrates they were not purposefully concealing matters from the Trustee.  The Court rejected this, holding…

Michigan Bankruptcy – District Court Decides Stephenson – Says Inherited IRAs Fully Exemptable

Bankruptcy in Michigan Inherited IRAS. Debtors Daniel and Janet Stephenson appealed an Order in their Ch. 7 bankruptcy to the U.S. District Court, Eastern District of MI, Southern Division.  The Standing Trustee’s objections to their claimed exemptions had been sustained.  Among their assets, the Debtors listed three inherited IRAs, exempting them in full through the federal exemption available, Sec. 552(d)(12).  Recently a 6th Circuit Bankruptcy Appellate Panel decided exemption guidelines.  Courts are to consider them “liberally in favor of debtor”, assigning the burden to “objecting parties to prove that an exemption is not validly claimed”, Schramm, 431 B.R. The District Court analyzed whether inherited funds are “retirement funds”, then, if they are exempt from taxation.  Concerning statute interpretation, the District Court is governed “by the…

Bankruptcy in Michigan – Reviewing Court Can Comment About A Factual Finding Being Mistaken

Michigan Bankruptcy- Reviewing Court and Ruling on comments. A visiting bankruptcy judge presided over an evidentiary hearing on objections to certain claims filed.    There were numerous related adversary proceedings pending.  During the hearing the Liquidation Trustee submitted a proposed Dismissal Order, with the disclaimer that applicable parties disagreed over the terms.  The Bankruptcy Court for the Western District of MI made a finding of fact that parties of this case had agreed in substance to the content of a specified paragraph in the proposal, when the terms of settlement were being read into the record.  Afterward the regularly assigned bankruptcy judge, not the visiting one, entered the Order as it had been presented.  Adding specifically in a note, the visiting judge was consulted before signing,…

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