Thursday, January 10, 2013

TOP 10 PROBLEMS WHEN FILING A CHAPTER 13 BANKRUPTCY. Terry Bankert Flint Bankruptcy Attorney 235-1970

The following is a list of the 10 most common objections filed to Chapter 13 plans:
  1. Failure to commit income tax refunds to the Chapter 13 plan.The Sixth Circuit has held that tax refunds are disposable income under 11 USC 1325Freeman v Schulman  (In re Freeman), 86 F3d 478 (6th Cir 1996). However, if the Chapter 13 plan proposes full repayment to unsecured creditors within the applicable commitment period, the disposable income test does not apply. 11 USC 1325(b)(1) should be read in the alternative: the debtor must propose to pay all of his or her unsecured creditors in full OR devote all of his or her disposable income to pay unsecured creditors. To facilitate compliance with the obligation to pay tax refunds to the trustee, the Eastern District has issued a notice stating
    that in each case in which an order confirming the plan has not yet been entered and in which the debtor’s plan provides for the payment of tax refunds to the trustee, the debtor shall sign, as requested by the trustee, (1) any appropriate IRS forms that authorize the IRS to forward the debtor’s tax refunds directly to the trustee, whether by check or direct deposit, and, (2) any appropriate form that will authorize the trustee to endorse, negotiate and deposit the debtor’s tax refund check for the debtor’s Chapter 13 account.

    Notice Regarding Tax Refunds in Chapter 13 cases (Bankr ED Mich eff. Mar 26, 2010). In cases in which the meeting of creditors has not been held, the debtor must sign these forms at the meeting. In cases in which the meeting of creditors has been concluded, the debtor must sign the forms at the confirmation hearing or as a condition of confirmation, as directed by the judge. When only one spouse files a Chapter 13 case but the debtor and the nondebtor spouse file a joint tax return, the debtor must provide the trustee on request the appropriate IRS forms signed by the debtor and by the nondebtor spouse. Thus, if a trustee requires the debtor to execute an IRS power of attorney form (form 2848), the form must be signed by both the debtor and the nondebtor spouse as a condition for confirmation of the debtor’s Chapter 13 plan. This is to ensure that any refund with respect to a joint tax return will be transmitted by the IRS to the trustee so that the debtor’s share of the joint tax refund will be applied to the debtor’s obligations under the debtor’s Chapter 13 plan. When the debtor and the nondebtor spouse file a joint tax return, the order confirming the Chapter 13 plan must include a formula or mechanism for allocating any joint tax refunds between the debtor and the nondebtor spouse to avoid unnecessary litigation in the future. When the debtor and the nondebtor spouse file a joint tax return and a joint tax refund is received by the Chapter 13 trustee, the trustee must promptly remit to the nondebtor spouse his or her share of the joint tax refund.Notice Regarding Refunds on Joint Tax Returns in Chapter 13 Cases (Bankr ED Mich eff. June 28, 2010).
  2. Failure to document or verify income on schedule I and the means test. Pay stubs provided should match income and deductions listed.
  3. Underfunding. Underestimating the claim amounts; incorrectly calculating plan payments needed due to failure to account for attorney fees; adequate protection and continuing payments to mortgage company that come due before confirmation.
  4. Feasibility. The debtor’s budget underestimates or omits ongoing expenses.
  5. Failure to devote sufficient income or the existence of unreasonable expenses. Debtors whose means test results in a negative or nominal dividend to unsecured creditors are no longer bound by the pre-BAPCPA specific requirement to commit all net disposable income to the Chapter 13 plan. However, many courts have found that the means test is not the last word and may only be a starting point. See Kibbe v Sumski  (In re Kibbe), 361 BR 302 (1st Cir BAP 2007); In re McCarty, 376 BR 819 (Bankr ND Ohio 2007); In re Hardacre, 338 BR 718 (Bankr ND Tex 2006).
  6. Failure to provide treatment for debts. These include debts from domestic support obligations, 401(k) loans, residential leases, condo association fees, taxes, employer loans, student loans, etc.
  7. Failure to provide required dividend to creditors. This is the result of amounts required by Chapter 7 liquidation analysis and disposable income requirements determined by the means test.
  8. Failure to disclose information on the statement of financial affairs. This is most often related to business interests, prior addresses, and lawsuits.
  9. Equal monthly payments to secured creditors. See 11 USC 1325(a)(5)(B)(ii), (iii).
  10. Failure to account for preferences and fraudulent conveyances in the liquidation analysis of the plan. 11 USC 1325(a)(4)requires funds that would be recoverable by a Chapter 7 trustee be included in the liquidation analysis and funds paid into the plan equal to what a Chapter 7 distribution would provide.
See Handling  Consumer and Small Business Bankruptcies in Michgian

Friday, October 9, 2009


PG 244," A LADDER OF CITIZEN PARTICIPATION" Journal of the American Institute of Planners(1969), Sherry Arnstein, from The City Reader/[edited by]Richard T. Legates, Richard T Stout,1943 III- trb notes

" the idea of citizen participation is a little like eating spinach; no one is against it in principal because its good for you. Participation of the governed in their government is, in theory, the cornerstone of democracy- a revered idea that vigiorously appaluded by virtually everyone."

"The appaluse is reduced to polite handclapps, however, when this principal is advocated by the have-not blacks,mexican Americans, Puerto Ricans, Indians, Eskimos, and whites."

" And when the have-nots define participation as redistribution of power, the American consensus of the fundamental principal explodes into many shades of out right racial, ethnic, ideological and political opposition."

* Citizen participation is power

*The typography of eight levels of participation may help in analysis of this confused issue.


8.Citizen control

7.Delegated power








1.non participation"

So what is my point here today?

On 10/08/09 I was part of a mini power struggle.

A group of dominate elites running a component of a political party and aligned through their own contrivance of a caucus system blocked an effort for a diverse group of body politic members to form an educational committee committed with a specific mission of holding elected officals accountable by reqular town hall meetings.

The idea of accountability generated from the elites but when a lack of total control in the process was apparent they reversed their position and blocked the initative.

I would describe the dominate groupd as placating through tokenism the sub group that desired to increase citizen participation in the party through educational programs.

The dominate group won this skimish, possibly protectionism for the sake of protectionism.

If Accountability is their mission, we will see if they have any impact. I suspect is was not and will not.

But why not educate.

A group of members of this body politic could simply conduct a program of education, coalition building, policy advocacy and political accountability of its elected leaders.

Anyone interested in increasing citizen participation in policy development and government by becoming active in an ad hoc political education committee.

Hows the spinach?

Posted here by
Terry bankert

Thursday, August 27, 2009


Recently many want to critique Mayor Walling for 2 of his appointment. So be it. But what is the goal of elected leadership. Maintaining political power, hopefully by providing services the cliental voters desire. To lead requires the maintenance of political power. Individual and coalition support of a Mayor will achieve that power. Mayor Walling faces a quick re-election battle. If he calculates the appointment of Eason And Poplar both tough seasoned political operatives who have the ability to delivery public services then that is his right. The Mayors objective is maintenance of political power.
Self governance be messy business at the local level, but then some say all politics is local so there3freo messy. Are you a member of this Flint self-governing political community or “ merely the helpless pawns of larger faceless forces”. Nobody wants to admit they are a pawn so how do you expect your political community to act? Do you not expect a Strong Mayor to collect the levers of power and a cadre of loyalist to accomplish his public policy objectives?
What we need is a Mayor who can forge powerful pro growth political coalitions block by block, precinct by precinct, downtown and in the neighborhoods. This is tough work. It appears this Mayor is surrounding himself with tough people. Good move.
We have experienced for the last decade local decision making dominated by entrenched elites that could not cope with the obvious economic decline of the USA auto industry. Small increments’ of effective policy are working mostly in the University corridor on third street downtown and the peppering in infill housing. This did not reflect a dispersion o pluralistic power ,rather the same entrenched actors have effectively pushed elected leadership aside except for the country treasurer and created their own foundation lead urban policy. Our Mayor is of this brotherhood but his survival will rely on a broad based coalition and will be in conflict with the referenced entrenched interests. He must surround himself with tough smart independent operative he can control. My question to the Mayor is not to question his picks but rather his ability to control them. Both Eason and {Poplar can make things happen in this community. But what things. The Mayor will be measured by their performance.
So lets not be one dimensional smart tough political operatives are by the application of power and influence Pollyanna’s. We elected a Mayor to find them, smart tough people who understand Flint, appoint them, direct then control them and take the credits or deficits cause by their performances.
The Mayoral General election of 2011 is almost upon us. Mayor Walling show us what you have got.
The City Reader, 3rd edition Edited By Richard T. leGates and Fredrick Stout. Routledge, Urban Reader Series.2003. Chapter4 -URBAN POLITICS,GOVERNANCE AND ECONOMICS-HOW TO STUDY URBAN POLITICAL POWER, by John Mollenkopf page 235

Sunday, January 18, 2009


The City Reader, 3rd edition Edited By Richard T. leGates and Fredrick Stout. Routledge, Urban Reader Series.2003.