August 2, 2012
What is the worst that could happen? In a recent local bankruptcy case, E.S. had a personal injury claim against Vioxx that she failed to mention in her bankruptcy. It was an asset of her estate. She argued that she did not know that her bankruptcy attorney did not include it in her bankruptcy, because, for one thing, it was an emotional time for her. She said that she was relying on her bankruptcy attorney to make correct disclosures in her petition.
One of the things that you will do on the day of your filing your bankruptcy is sign your bankruptcy petition asserting that the petition you are filing is true and that you have read it. The judge noted that she had signed the petition and as such failing to disclose the asset could not be considered inadvertent.
How did the Vioxx Debacle Happen? USA Today story from 10/12/2004
October 14, 2011
Mr Pierrotti filed for a Chapter 13 bankruptcy to keep from losing his home. He had missed a few mortgage payments and the home was going into foreclosure. His bank and the IRS both had a security interest in his home. He owed the IRS back taxes for quite a few years back and was hoping he would be able to pay it back a little at a time, for about 15 years. The United States 5th Circuit Court of Appeals turned him down. For one thing the longest a Chapter 13 could last is 5 years:
The sole issue before us on appeal is whether a proposed Chapter 13 plan may modify a secured claim for a tax deficiency into a long-term debt payable over a period longer than the Bankruptcy Code-mandated term of a Chapter 13 plan In his proposed Chapter 13 bankruptcy plan, Debtor-Appellant Carl Mitchell Pierrotti sought to “modify” the Internal Revenue Service’s secured claims for long-overdue tax deficiencies into a long-term debt payable over a period of fifteen years. We hold that he may not do so, because those tax deficiencies are not debts whose pre-bankruptcy payment terms include a final payment date that falls beyond the five-year term of Pierrotti’s Chapter 13 plan.
IN THE MATTER OF PIERROTTI, Court of Appeals, 5th Circuit 2011
PLEASE NOTE THAT THE PICTURE ABOUT CANCELING A SUBSCRIPTION TO THE I.R.S. IS MEANT TO BE HUMOROUS AND IS NOT LEGAL ADVICE. NOT TO MENTION IT IS NOT AT ALL POSSIBLE.