This article originally appeared at https://www.forbes.com/sites/adamminsky/2020/09/02/court-allows-bankruptcy-discharge-of-200000-in-student-loans/#21bf3dee34fd----------------Court Allows Bankruptcy Discharge Of $200,000 In Student LoansAdam S. Minsky, Esq.A new ruling by a U.S. appeals court has affirmed the cancellation of a borrower’s $200,000 in private student loans.In McDaniel v. Navient, the U.S. Court of Appeals for the 10th Circuit affirmed a lower bankruptcy court’s determination that a borrower’s private student loan debt could be discharged in bankruptcy.The bankruptcy code treats student loan debt differently from most other forms of consumer debt, such as credit cards and medical bills. Borrowers must generally prove that they have an “undue hardship” in order to discharge their student loan debt in bankruptcy. These restrictions initially only applied to federal student loans, but were subsequently expanded to cover private student loans following the passage of a 2005 bankruptcy reform bill.The “undue hardship” standard applied to student loan debt is not adequately defined in statute, so bankruptcy judges have established various tests (which vary by jurisdiction) to determine discharge eligibility. In order to show that they meet this standard, borrowers must initiate an “adversary proceeding,” which is essentially a lawsuit within the bankruptcy case that is brought against the borrower’s student loan lenders. Through the adversary proceeding, the borrower must present evidence showing that they meet the undue hardship standard, while the student lenders present opposing evidence. The adversary proceeding can be a long and invasive process for borrowers, and can get quite expensive for those who retain a private attorney. Student loan lenders may also have significantly more resources than borrowers, which can give them an edge in the litigation. As a result, many student loan borrowers are unsuccessful in proving undue hardship, and many others don’t even try.The recent ruling from the 10th Circuit could change this.The borrower in the case had taken out $120,000 in private student loans. When she became unable to afford the monthly payments, she said that Navient would not work with her to provide an affordable repayment schedule (private student loans are not eligible for federal income-driven repayment plans). She eventually went into bankruptcy. After her bankruptcy ended, Navient added on tens of thousands of dollars in additional interest, leaving her in an even worse position and causing her to pay even more money to Navient. She ultimately then petitioned the bankruptcy court to reopen the bankruptcy case to rule that the private student loans were, or should have been, discharged.Rather than basing the decision on the undue hardship standard, the bankruptcy court found that the private student loans at issue did not even fall within the “undue hardship” provision of the bankruptcy code in the first place. The bankruptcy court held that the borrower’s private student loans were not “an obligation to repay funds received as an educational benefit” within the meaning of the bankruptcy code because they “were not made solely for the ‘cost of attendance’” at the borrower’s school.Navient appealed, and the 10th Circuit Court of Appeals affirmed the lower bankruptcy court’s decision. Furthermore, the court rejected Navient’s argument that these private student loans were covered by the discharge exemptions provided by the 2005 reforms to the bankruptcy code.The ultimate impact of this decision remains to be seen. While the case could set important precedent and be cited in future bankruptcy cases, that precedent would (for the time being, at least) be limited only to the 10th Circuit’s jurisdiction, which includes Colorado, New Mexico, Oklahoma, Utah, and Wyoming. Bankruptcy scholars have also suggested that the ruling may only affect the dischargeability of private student loans that either exceed the cost of attendance at an accredited school or private student loans from non-accredited schools, rather than all private student loans.Nevertheless, the decision is an important ruling, and serves as a reminder that pursuing a bankruptcy discharge of student loan debt is not a lost cause, despite the many hurdles.

Told a Widow this Week, She’ll Lose her House because of COVID and Business Debts I had a heart-breaking call this week with a widow, who lost her small shop in the COVID depression. She has about $65,000 in business debts and no way to pay them.  If she tries to file Chapter 7 bankruptcy […] The post Virginia Homestead Exemption too low to protect this Widow. by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

  In an important decision from the 10th Circuit Court of Appeals, the court found that purported student loans incurred for paying college expenses had been discharged in the debtor's chapter 13 bankruptcy case.  McDaniel v. Navient Sols. LLC (In re McDaniel), 2020 U.S. App. LEXIS 27687, Case No 18-1445 (10th Cir. 31 August 2020).   The claims at issue involved $200,000 in private 'tuition answer' loans held by Sallie Mae when the case was filed.  The initial chapter 13 plan asserted that debtors had no student loans.  While the trustee raised an initial objection as to this, the plan was amended to assert that student loans were to be treated as an unsecured class or deferred until the end of the plan.  There was no request to treat the debts as dischargeable or nondischargeable.   All the claims filed by Sallie Mae (who later became Navient) were allowed, and the chapter 13 discharged in 2015.  The discharge included standard language that 'most student loans' were not discharged.  Over the next two years Debtors paid Navient an additional $37,460 on their loans.   In June 2017 the debtors moved to reopen the bankruptcy to seek a declaratory judgment that the loans were discharged in the bankruptcy, and for damages based on Navient's collection efforts on such loans.   Navient sought to dismiss the action asserting res judicata that such loans were discharged in the bankruptcy.  The bankruptcy court rejected this, finding no determination of dischargeability in the chapter 13 case; and further found that the loans were not  obligations to repay funds received as an educational benefit as required by §523(a)(8)(A)(ii).  On appeal the 10th Circuit agreed that there was no finding during the chapter 13 case that these loans were nondischargeable, and the plan provisions made no such determination.  The mere fact that the court allowed the debtors to defer their student loan payments until the end of the plan does not mean that such loans are excepted from the discharge.  The record showed that Navient was in fact paid proportionally on the student loan claims.  As to whether such loans qualify under §523(a)(8)(A)(ii), the court first noted that the lender has the initial burden of proof to establish the existence of the debt and that the debt is a student loan qualifying under the statute.  The 10th Circuit agreed with the bankruptcy court's conclusion that an 'obligation to repay funds received as an educational benefit' under §523(a)(8)(A)(ii) is a separate thing from an 'educational loan' under §523(a)(8)(A)(i).  Given the separate provisions in the section for the separate types of debt, the court will treat the requirements separately. The term educational benefit, the term benefit should be interpreted similar to health benefits, unemployment benefits, or retirement benefits.  It implies a payment, gift, or service that ordinarily does not need to be repaid.  As the remainder of §523(a)(8)(A)(ii) also refers to scholarships or stipends, this supports normally are not required to be repaid.    Note a different result would have been likely had the claims not been paid in the plan, but actually deferred until the case was over.Michael BarnettLaw Offices of Larry Heinkel, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com

This article first appeared in the New York Times on 9\1\20 at https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html---------------- Small-Business Failures Loom as Federal Aid Dries UpMany owners face tough choices after a federal loan program and other government moves to bolster the economy have run their course.Maurice Brewster’s company shuttled tech workers to and from work in the Bay Area. He has pursued new sources of revenue, but is not sure the operation can survive beyond the end of the year.Maurice Brewster’s company shuttled tech workers to and from work in the Bay Area. He has pursued new sources of revenue, but is not sure the operation can survive beyond the end of the year.Credit...Jamie Cotten for The New York TimesBy Ben Casselman    Sept. 1, 2020The United States faces a wave of small-business failures this fall if the federal government does not provide a new round of financial assistance — a prospect that economists warn would prolong the recession, slow the recovery and perhaps enduringly reshape the American business landscape.As the pandemic drags on, it is threatening even well-established businesses that were financially healthy before the crisis. If they shut down or are severely weakened, it could accelerate corporate consolidation and the dominance of the biggest companies.Tens of thousands of restaurants, bars, retailers and other small businesses have already closed. But many more have survived, buoyed in part by billions of dollars in government assistance to both businesses and their customers.The Paycheck Protection Program provided hundreds of billions in loans and grants to help businesses retain employees and meet other obligations. Billions more went to the unemployed, in a $600 weekly supplement to state jobless benefits, and to many households, through a $1,200 tax rebate — money available to spend at local stores and restaurants.Now that aid is largely gone, even as the economic recovery that took hold in the spring is losing momentum. The fall will bring new challenges: Colder weather will curtail outdoor dining and other weather-dependent adaptations that helped businesses hang on in much of the country, and epidemiologists warn that the winter could bring a surge in coronavirus cases.As a result, many businesses face a stark choice: Do they try to hold on through a winter that could bring new shutdowns and restrictions, with no guarantee that sales will bounce back in the spring? Or do they cut their losses while they have something to salvage?For the Cheers Replica bar in Faneuil Hall in Boston, the answer was to throw in the towel after nearly two decades in business.“We just came to the conclusion, if we’re losing that much money in the summertime, what’s the winter going to look like?” said Markus Ripperger, president and chief executive of Hampshire House, the bar’s parent company.Many businesses that failed in the early weeks of the pandemic were already struggling, had owners nearing retirement or were otherwise likely to shut down in the next couple of years. Those closing down now look different.Cheers was a longstanding, successful business with access to capital and owners willing to invest to keep it going. But the bar, built to resemble the one on the 1980s sitcom, depended heavily on tourist traffic that collapsed during the pandemic.The company’s three other restaurants, which include the original Cheers bar on Beacon Hill that was the inspiration for the show, remain in business. But Mr. Ripperger said he was worried about what a winter resurgence of the virus might mean.The owners of the Cheers Replica bar in Boston, which depended heavily on tourist traffic, have decided to close after nearly two decades in business.The owners of the Cheers Replica bar in Boston, which depended heavily on tourist traffic, have decided to close after nearly two decades in business.Credit...Kayana Szymczak for The New York Times“We’re on life support now, and if we have to go through another shutdown or more restrictions, it’s going to be even worse for a lot more restaurants that are just barely scraping by,” he said.On Friday, the Commerce Department reported that consumer spending rose only modestly in July after two months of resurgence and remained below pre-pandemic levels. Economists warn that without the $600 a week in extra unemployment insurance, spending is likely to slow further this fall.Data from Homebase, which provides time-management software to small businesses, shows that roughly 20 percent of businesses that were open in January are closed either temporarily or permanently. The number of hours worked — a rough proxy for revenues — is down by even more during what should be the year’s busiest period. Both figures have stalled or turned down in recent weeks.Small businesses have grown more pessimistic as the pandemic has dragged on. In late April, about a third of small businesses surveyed by the Census Bureau said they expected it to take more than six months for business to return to normal. Four months later, nearly half say so, and a further 7.5 percent say they do not expect business ever to bounce back fully. About 5 percent say they expect to close permanently in the next six months.The ultimate damage could be much greater. In a recent survey by the National Federation of Independent Businesses, a small-business lobbying group, 21 percent of small businesses said they would have to close if conditions did not improve in the next six months. Other private-sector surveys have found similar results.Widespread business failures could cause lasting economic damage. Nearly half of American employees work for businesses with staffs under 500, meaning millions of jobs are at stake. And while new businesses would inevitably spring up to replace those that close, that process will take far longer than simply reopening existing businesses.“The consequences to allowing a tidal wave of closures is we will make every aspect of the recovery harder,” said John Lettieri, president and chief executive of the Economic Innovation Group, a Washington research organization.There could also be longer-run implications. Despite high-profile bankruptcies in the retail industry and other sectors, many large corporations have been able to solidify their position during the pandemic: demanding concessions from landlords, borrowing billions of dollars at low interest rates and leveraging sophisticated supply chains and distribution systems to reach suddenly homebound customers. Small businesses, which usually have less access to credit and rely more heavily on foot traffic, have been struggling to survive.“I can survive because I’m betting on another stimulus package,” said Candace Combs, who runs the In-Symmetry Spa in San Francisco with her brother. “But without that, we start to really teeter.The challenge has been particularly acute for Black-owned businesses, which were more than twice as likely to close down in the early months of the pandemic than small businesses over all, according to research from the Federal Reserve Bank of New York. Black-owned businesses were more likely to be in areas hit hard by the virus, had less of a financial cushion and were less likely to have established banking relationships, which put them at a disadvantage in seeking loans under the emergency Paycheck Protection Program in the critical first weeks that the aid was available.By the time they got access to the federal money, “many Black-owned businesses were already out of business,” said Ron Busby, president and chief executive of the U.S. Black Chambers. “We just couldn’t make it that long.”Maurice Brewster is hanging on. He runs Mosaic Global Transportation, a California company that was growing quickly before the pandemic running the private buses that shuttled tech workers between their San Francisco homes and their suburban office campuses.Those campuses have been all but empty since March, and many companies aren’t planning to bring workers back until next year. Other parts of Mr. Brewster’s business — providing transportation for conventions, wine tours and other events — are also suffering.To survive, Mr. Brewster, who is Black, has slashed costs and sought new lines of business, including delivering packages for Amazon — “anything to get the vehicles moving and get some revenue coming in the door,” he said.Mr. Brewster says he is confident he can make it through the end of the year. After that, he doesn’t know.“You just can’t go a year unless you have just an endless pool of money to sustain you until March or April of 2021,” he said. “A lot of us are going to go out of business.”Economists say there is time to limit the damage. Despite a rocky start, the Paycheck Protection Program eventually paid out more than half a trillion dollars in loans and probably saved many businesses from failure, according to research from economists at the University of Illinois and Harvard. But the program lapsed in August, and if Congress doesn’t move soon to replace it, the earlier effort could end up delaying failures rather than preventing them.Many experts still expect Democratic and Republican leaders to reach a deal on an aid package that includes support for small businesses, but a new, large-scale program seems increasingly unlikely.“Why didn’t we use the time that P.P.P. bought us to design the kind of program that would be commensurate with the national challenge that we’re facing?” Mr. Lettieri, of the Economic Innovation Group, asked. “That’s all P.P.P. was. It was a mechanism to buy time. It was never the long-term solution.”A paycheck protection loan helped keep In-Symmetry Spa afloat early in the pandemic. But the money is long gone, and the San Francisco spa hasn’t been allowed to reopen. Nearby storefronts are boarded up, and Candace Combs, who has run the spa with her brother for two decades, said she doubted that many of those businesses were coming back.“I can survive because I’m betting on another stimulus package,” Ms. Combs said. “But without that, we start to really teeter.”

As you may already be aware, student loans can’t usually be discharged in bankruptcy. There are exceptions to that rule, but the truth remains: student debt is very hard to get rid of. So what happens to your loans, then, if you must declare bankruptcy? The Brunner Test First, let’s examine what it would take […] The post What Happens to Student Loans in a Philadelphia Bankruptcy? appeared first on .

Why You Should (Sometimes) Before Bankruptcy Ask for Arbitration The fine print in your credit card agreement likely gives you–and the credit card company–the right to ask for arbitration.  You can guess that the fine print isn’t in there to help the consumer, but sometimes before bankruptcy you can use arbitration for your benefit. How […] The post Why You Should (Sometimes) Ask for Arbitration by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

  In Whaley v. Guillen (In re Guillen), 2020 U.S. App. LEXIS 26980, Case #17-13899 (11th Cir. Aug 25, 2020) the appellate court followed the majority rule in finding that a debtor does not have to show a change of circumstances to modify a confirmed chapter 13 plan to reduce the payment to unsecured creditors.   The case involved a plan that had been confirmed with a $20,172 dividend to unsecured creditors, but after confirmation counsel for Debtor filed a fee application for his fees in voiding a 2nd mortgage on the home (for failure to perfect the mortgage) increasing the total fees from $4,900 to $8,295 and correspondingly decreasing the dividend to unsecured creditors.  Debtor filed a new plan post-confirmation reflecting these changes, and the chapter 13 trustee objected asserting that the confirmed plan was res judicata under §1327(a) and In re Tennyson, 611 F.3d 873, 875 (11th Cir. 2010) (the provisions of a confirmed plan bind the debtor and each creditor, whether or or not such creditor has objected to, has accepted, or has rejected the plan).  The bankruptcy court confirmed the modified plan, and the trustee appealed.  The 11th Circuit recognized the effect of §1327(a), but noted an exception to the rule requiring a change of circumstances in §1329 of the code.  §1329 permits modification of confirmed plans to, among other things, increase or decrease the dividend to a class of creditors.  There is no requirement in §1329 to show a change of circumstances, and the courts should not read in a requirement not contained in the code.   The court also found this interpretation was consistent with the statutory scheme of Title 11, noting numerous situations where Congress was clear that it was imposing a 'circumstances' requirement.  The court also found this result to be consistent with its prior decision in In re Hoggle, 12 F.3d 1008, 1011-12 (11th Cir. 1994) which found §1322(b)(5) did not bar debtors from modifying confirmed plans under §1329 to cure post-confirmation defaults.   While Hoggle noted Congressional intent to permit modification of a plan due to changed circumstances not foreseen as of confirmation,  but also noted that the modification provision is flexible.  Such change of circumstances was shown in Hoggle to be a sufficient basis to support a modification, but was not set as a necessary condition for any modifications.Michael BarnettLaw Office of Larry Heinkel, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com

Do you need an IRS tax lawyer in Philadelphia? Contact Philadelphia tax attorney David M. Offen and put his more than 20 years’ experience as a bankruptcy and tax settlement lawyer to work for you. Mr. Offen knows how to negotiate with the IRS to settle tax debt and has helped hundreds of people resolve their past-due tax situation and get free of debt. If you are looking for a highly qualified, professionally-trained and trusted Philadelphia IRS back taxes lawyer, call or email us to schedule your free consultation. We have the experience and knowledge to help you, today! Experienced Philadelphia IRS Back Tax Lawyer As a professional firm dealing with back taxes through our legal services, we are familiar with the complicated procedures of the Internal Revenue Service in tax debt negotiation. Our country’s tax system and structure can be overwhelming for many people, but that’s where we step in to help. We will help you through the entire process so that you won’t need to worry about things the way you are now. And, our law firm provides much more than just IRS tax negotiation. We also solve people’s other debt problems, such as: Foreclosures – learn how you can keep your family home! Intervening with debt collection lawsuits on your behalf Stopping wage garnishments and bank levies Fighting repossession of automobiles Contact a Highly Qualified Philadelphia Tax Debt Lawyer Today! We offer you a complimentary consultation during which together we determine whether IRS negotiation, bankruptcy, or some other legal avenue is the most appropriate and effective path to take. We have successfully helped thousands of clients deal with a wide variety of legal and debt issues including IRS debt and past-due State of Pennsylvania taxes and City of Philadelphia taxes. Our experience and our track record of success will speak for itself, and we’re confident that our firm will provide you with the most trusted Philadelphia IRS back tax lawyer in the Philadelphia area. Contact us today to schedule your free consultation and get free of debt! Negotiating with the IRS To Settle Past-Due Income Tax Debt There are two ways we can help you with your tax burden: IRS Offer In Compromise One is to negotiate what is called an “offer in compromise” (OIC). Simply put, it is when the IRS accepts a lump sum from you that is less than what is owed, but that settles your tax liability in full. IRS Installment Agreement The second way we can help you with your tax debt is to negotiate a pay-off over time, called an installment agreement. Depending upon your financial situation and the amount you owe, you might even qualify for a partial payment plan and have the remainder of the debt forgiven when you’ve completed the plan. How to Beat the IRS in Bankruptcy There are situations where the IRS will not compromise with people owing income tax.  If this happens to you, you still have options to get free of debt, but it requires a careful analysis of the nuances of how past-due income tax is handled in bankruptcy. That’s where we come in. What the IRS Doesn’t Want You To Know Everyone’s heard the two certainties of life according to Ben Franklin – death and taxes. While we can’t offer advice to outsmart the grim reaper, old Ben should have spoken to a bankruptcy attorney who can get taxes discharged. As long as you haven’t been caught for tax evasion or fraud, we might be able to get your unpaid taxes discharged in bankruptcy. Keep reading to learn how filing bankruptcy could help you wipe out old tax debt–and what mistakes could leave you stuck with a tax bill. Taxes Are (Not) Forever There is a common misconception that Federal income tax debts cannot be discharged in bankruptcy. It is true that income tax is a priority debt, and that the government makes it difficult to discharge this kind of debt. But a bankruptcy attorney can discharge a variety of unpaid taxes in a strategic bankruptcy. Cheat on Taxes – Get Stuck With A Bill The IRS has developed a reputation as the most relentless  of our federal agencies. Legendary gangster Al Capone evaded police and paid off prohibition agents–but in the end, it was the Internal Revenue Service that brought him down. Every year, high-profile celebrities and sports players get nabbed trying to dodge the tax collector. Not only is tax evasion a crime—-it also makes you ineligible to discharge your tax debts. Don’t let the Internal Revenue Service sabotage your finances. When Can You Discharge a Tax Debt in Bankruptcy? When dealing with the Internal Revenue Service, it’s important that you choose one of the Philadelphia tax debt attorneys that is knowledgeable and experienced in tax debt. The law is very complex and in order to have tax debt discharged during bankruptcy, the tax debt must meet certain conditions. In short, the tax debt: Must be income taxes. Cannot be payroll taxes or fraud penalties. The tax debt is at least three years’ old The tax debt must have been assessed by the IRS at least 240 days before you file for bankruptcy or must not have been assessed yet. More specifically, tax debt must meet the following conditions to be eligible for discharge in bankruptcy. These rules are followed strictly, and even a two or three day grace period will not be permitted. The Three-Year Rule: The taxes you want to discharge must have been due at least three years before the date you filed bankruptcy. For federal income tax, this is on or around April 15th. State and local taxes will differ. Here’s an example: If you don’t pay your taxes due on April 15th, 2019, you could not file to discharge that debt until April 15th, 2022 at the earliest. If your file for a tax extension, three years runs from the date of the extension, not the date that the tax was due. The Two-Year Rule: You must wait two years from the date you filed your taxes to file for a bankruptcy discharge. This grace period allows you to still get a discharge of your taxes three years from when they came due when filing late. The date your taxes are legally counted as filed depends on when and how you send the information to the IRS. If you send tax returns certified mail via the United States Postal Service, and the postmark is on or before April 15th, the taxes will be treated as if they were received on time, even if they arrive at the IRS office after that date. However, if taxes are mailed after April 15th, or are mailed by a private carrier and arrive after April 15th, the date of filing is the actual date the IRS receives your documents, not the date they were posted. This might seem like a trivial detail, but since these deadlines are absolute, just one day’s delay could be the difference between a tax being dischargeable or not. The 240-Day Rule: If your tax debt passes the previous two tests, there is one more condition: The actual date of assessment must be at least 240 days prior to filing bankruptcy. If your tax debt is a case of simply not paying, then the date of assessment should be close to your filing date. But in tax disputes, the IRS can assess additional taxes for several years after the original assessment was made. If you are involved in any tax action, you should notify your bankruptcy lawyer immediately, as this could seriously impact your ability to have these taxes discharged. Your Philadelphia debt relief bankruptcy attorney can determine if your tax debt meets these requirements and is eligible for discharge. In fact, it is common for individuals to have some tax debt that meets the requirements of the IRS and some that does not. If this is the case for you, your Philadelphia IRS tax relief attorney will determine how much of your tax debt can be discharged and how much you must still pay. When Taxes Can’t Be Discharged in Bankruptcy Unfortunately, not all taxes can be discharged in a bankruptcy case, such as the following: Recently missed taxes. You have to wait three years (at least) before you can file to have bankruptcy taxes discharged. Fraudulently filed taxes. Taxes assessed when no return was filed. Substitute returns filed on your behalf by the IRS do not count towards the filing requirement. Can Bankruptcy Help With Tax Liens? Bankruptcy cannot clear tax liens already placed against your assets. What bankruptcy can do is prevent new liens from being filed or other collection actions from being taken against you, like wage garnishment or a levy on your bank account.. Liens survive bankruptcy intact. That means that you do not personally owe the government the value of discharged taxes as a debt, but the government’s claim to your assets still exists. When this happens, the lien will not attach to assets you acquire after the bankruptcy concludes. If the underlying personal liability cannot be discharged, then not only will the lien survive, but it will also attach itself to assets you acquire after bankruptcy and must eventually be paid to avoid future levies. Examples of Discharging IRS Debt in Bankruptcy One recent client owed the IRS over $55,000 in delinquent taxes, We filed a Chapter 13 bankruptcy case for him, which reduced his monthly payment from $1200 to $750.  At the end of 36 months, the remainder of the debt was discharged! The couple owed over $125,000 in taxes to the IRS, the Commonwealth of Pennsylvania, and the City of Philadelphia. We saved them over $100,000 by filing a Chapter 13 case and got that debt discharged! And these are only two of our many, many clients who have gotten free from tax debt. Disclaimer: while these are true stories of clients we helped, we cannot guarantee the same or similar result in any other matter, including yours. Do You Need Help Negotiating or Filing Bankruptcy on Back Taxes? If you need an expert to guide you through the process of determining how best to handle your IRS debt, schedule your free consultation with Philadelphia tax and bankruptcy attorney David M. Offen by calling (215) 625-9600. You will get your questions answered about how negotiation and bankruptcy can help you with taxes owed to the Internal Revenue Service and/or State and Local Governments. Let us help you get your fresh start. The post IRS Negotiation Attorney Philadelphia appeared first on David M. Offen, Attorney at Law.

THE DEMISE OF NUNC PRO TUNC LEASE REJECTION[1] Bankruptcy Code § 365(b) enables trustees and debtors in possession (“Trustees”) to “reject” or terminate pre-petition leases. This leaves the non-debtor lessor without a lessee and with a “rejection” claim for what may be less than the rent reserved under the balance of the lease.[2] Before a lease is rejected, Trustees must pay and remain current on post-petition rent due under leases.[3] Unpaid post-petition rent is an “administration” claim with priority over unsecured claims and sharing estate assets with other administration priority claims, such as the Trustees’ professionals[4]. Trustees sometimes seek to reject leases with the date of rejection being “nunc pro tunc” or retroactive to an earlier date. This retroactive rejection reduces the Trustees’ and debtors’ estates’ obligations and exposure to landlords for post-petition lease obligations.[5] It’s not good for landlords. Obtaining “nunc pro tunc” rejection required Trustees: (1) moving to reject the lease promptly; (2) promptly acting to set the motion for hearing; (3) vacating the premises; and (4) showing the Landlord had an improper motive in opposing rejection of the lease nunc pro tunc. [6] The End of Nunc Pro Tunc Recently, in Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, ––– U.S. ––––, 140 S. Ct. 696, 206 L.Ed.2d 1 (2020)(“Acevedo”), the United States Supreme Court, rejected the effectiveness of a nunc pro tunc order. It held: “[f]ederal courts may issue nunc pro tunc orders, or ‘now for then’ orders, … to ‘reflect [ ] the reality’ of what has already occurred …. ‘Such a decree presupposes a decree allowed, or ordered, but not entered, through inadvertence of the court.’ … Put colorfully, ‘[n]unc pro tunc orders are not some Orwellian vehicle for revisionist history — creating ‘facts’ that never occurred in fact.”[7] Call For Free 15 Minute Consultation The End of Lease Rejections Nunc Pro Tunc More recently, In re Donghia, Inc.,[8] applied Acevedo to decline making a lease rejection nunc pro tunc. Following Acevedo, that court, “[p]ut plainly, the court cannot make the record what it is not.” Even if Trustees meet the standard for nunc pro tunc lease rejection, bankruptcy courts seem precluded from granting it by invoking “some Orwellian vehicle” to “make the record what it is not.”[9] Retroactive lease rejections, like Orwell’s Winston Smith,[10] may cease to exist. Remember that the next time someone tries one you or your client. References [1]© 2020 Wayne M. Greenwald [2] Rejection claims may not exceed: (A) the rent reserved by the lease, without acceleration, for the greater of one year, or 15%, not to exceed three years, of the remaining term of such lease, following the earlier of: (i) the date of the filing of the petition; and (ii) the date on which such lessor repossessed, or the lessee surrendered, the leased property; plus (B) any unpaid rent due under such lease, without acceleration, on the earlier of such dates; 11 U.S.C. § 502(b)(6). [3] 11 U.S.C. § 365(d)(3) and (5). [4]11 U.S.C. § 503(b) [5] See, 25 No. 6 J. Bankr. L. & Prac. NL Art. 3 Understanding the Commercial Landlord’s Claims in a Tenant Bankruptcy (“Landlords are adversely affected by retroactive lease rejection because of the effect it may have on their entitlement to priority payments.”) [6] See, In re Donghia, Inc., 2020 WL 2465503, at *3–4 (Bankr. D. Conn. May 12, 2020). citing, In re At Home Corp., 392 F.3d 1064, 1072 (9th Cir. 2004), cert. denied sub nom. Pac. Shores Dev., LLC, v. At Home Corp., 546 U.S. 814 (2005). [7] In re Telles, 2020 WL 2121254, at *1 (Bankr. E.D.N.Y. Apr. 30, 2020), citing, Acevedo, 140 S. Ct. at 700-01. [8] 2020 WL 2465503, at *3 [9] Id. [10] The hero in George Orwell’s book “1984.” The post The Demise Of Nunc Pro Tunc Lease Rejection appeared first on Wayne Greenwald, P.C..

https://catalyst.independent.org/2020/08/22/covid-19-small-business-post-pandemic/-----------Will Small Businesses Stay Closed Post-Pandemic?Can the United States stand to lose the four million small businesses Oxxford predicts?By Luka Ladan August 22, 2020 Economy & Jobs| Articlesfacebook sharing buttonlinkedin sharing buttontwitter sharing buttonemail sharing buttonprint sharing buttonsharethis sharing buttonMore than one million. That is how many small businesses have closed in the United States, due, in one way or another, to the COVID-19 pandemic.According to New York-based Oxxford Information Technology, as many as 1.4 million small businesses closed their doors or temporarily suspended operations in the second quarter. By the end of the year, four million small businesses could be lost. This means job loss of epic proportions: In June, the number of people working at companies with fewer than 500 employees (e.g. the “small business” threshold) dropped by nearly 11 percent from its February peak.Millions and millions of previously employed Americans are being affected, to say nothing of those who enter the job market every year, who they are now competing with.Unfortunately, the short-term economic bleeding could be even worse than anticipated. Thousands of small businesses are closing their doors without reporting closure, which Bloomberg’s Madeleine Ngo describes as “silent failures.” In Ngo’s words: “This wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court.”While the immediate economic picture is anything but rosy, the stubborn persistence of the coronavirus also raises longer-term questions. Namely, how will a “black swan” event like the COVID-19 pandemic impact entrepreneurship in the years and decades to come?Entrepreneurship is already an uphill battle. One in five small businesses fails within the first year. By the end of their fifth year, roughly 50 percent have been wiped out. Within a decade, only about a third survive.Then, there is generational difference. The Millennial generation was already more risk-averse than its predecessors, with many young professionals choosing a traditional work arrangement over the turbulence of business formation. Interestingly, Millennials do fancy themselves as entrepreneurial, with 60 percent of Millennials considering themselves entrepreneurs and 90 percent recognizing entrepreneurship as a mentality.However, they are not walking the walk: In 2015, the share of people under age 30 who own private businesses reached a 24-year low, plummeting from 10.9 percent in 1989 to just 3.6 percent. More recently, Guidant Financial found that 12 percent of America’s small business owners are Millennials, although they comprise half of the U.S. workforce.Of course, the Millennial generation’s risk-aversion is not one-dimensional. From student loan debt to an inability to gain market share, there are many explanations for slumping start-up rates, and some are certainly valid. At a time when “cash on hand” is more valuable than ever, entrepreneurship may simply be a bridge too far.Which brings us back to the COVID-19 pandemic: Where does entrepreneurship go from here? More likely than not, an already risk-averse generation will take in a “black swan” event and decide to mitigate risk even further. The sudden vulnerability of America’s labor market will be reason enough, for Millennials and many other Americans, to opt for the “sure thing” of traditional employment, rather than the great unknown of entrepreneurship.Look at it this way: In 2001, only 24 percent of Americans then aged 25-to-34 claimed that fear of failure was keeping them from starting a business. By 2014, 40 percent of the same demographic reported that fear—a 16 percent increase between generations. The COVID-19 pandemic is unlikely to diminish those anxieties, when business failure has become so mainstream.None of these trends bode well for U.S. economy, one dependent on the growth potential of human innovation. There will always be exceptions to the rule (see: Mark Zuckerberg), but would a younger Mark Zuckerberg decide to become an entrepreneur in today’s business climate? Perhaps not.One thing is clear: A large-scale shift away from entrepreneurship is sure to undermine America’s long-term gross domestic product, job creation, poverty, and other economic indicators. Without the entrepreneur, America’s once-extraordinary economic experiment begins looking like the rest.