I’m required to give you three legal disclosures Now that most consultations are by phone and zoom, I’m posting these on my webpage.  The first disclosure This first disclosure tell you that you have four choices under the bankruptcy law. Chapter 12 is only for farmers, and fisherman. I’ve never done a farmer Chapter 11 […] The post Required fine print notices by Robert Weed appeared first on Robert Weed - .

On March 25, 2020, the U.S. Senate passed the Coronavirus Aid, Relief and Economic Security Act” (CARES Act). The House is expected to pass the bill today. One provision of the bill increases the eligibility limits for small business debtors from $2.7 million to $7.5 million. The amendment will only apply to cases commenced after its effective date and will be subject to a sunset provision after one year.Since many more businesses will be eligible to file under the small business provisions, it is worthwhile to review the pluses and minuses of falling within Subchapter V.  Subchapter V, which is titled Small Business Debtor Reorganization consists of 11 U.S.C. Sec. 1181-1195. Eligibility Unlike the previous small business provisions of Chapter 11, Subchapter V is voluntary. An eligible debtor must opt in to participate. As amended by the CARES Act, a small business debtor is a person (a) engaged in commercial or business activities (b) but not a person whose business consists of owning single assets real estate (c) that has aggregate noncontingent liquidated secured and unsecured debts which do not exceed $7,500,000 not counting debts owed to affiliates. At least 50% of the person's debts must arise from business or commercial activities.  11 U.S.C. Sec. 1182(1).  Example: A restaurant owes $50,000 to its employees, $5,000,000 to secured lenders and $1,000,000 in taxes. It is being sued for $10 million by a customer who became obese from eating too many nachos.   This company would be eligible because its noncontingent liquidated debts total $6,050,000 and they arose from commercial or business operations.Example: A business owns three apartment complexes in different parts of Austin. It owes $7,000,000 in secured debts and $100,000 in tenant security deposits from tenants who moved out because the apartments were smelly. This debtor is below the eligibility limits. It is not a single asset real estate debtor because it owns three separate real estate projects.Example:  A lawyer owes $100,000 on a business line of credit, $100,000 in payroll taxes,  and $500,000 on his home. He would not qualify because less than half of his debts arose from business or commercial activities (unless he runs his law practice out of his home).Stricter TimelinesA plan must be filed within ninety (90) days from the petition date except that the court may extend this time "if the need for the extension is attributable to circumstances for which the debtor should not justly be held accountable." 11 U.S.C. Sec. 1189(b). I am trustee in a case where a debtor that sells chicken wings will be asking for an extension of time to file its plan because the shelter in place orders issued by the City of Austin have drastically limited its ability to do business. While I can't say how the court will rule, that seems like a pretty good case for an extension to me. On the other hand, if the reason for an extension is I need more time because I haven't filed tax returns in three years and I haven't hired an accountant to go through my ten boxes of unsorted receipts, that would probably not fly.Easier Confirmation Standards Subchapter V eliminates several requirements which make it difficult for small businesses to confirm a plan. First, there is not a separate disclosure statement. The plan must contain a brief history of the debtor, a liquidation analysis and projections. 11 U.S.C. Sec. 1190(1).A plan may modify a loan on the debtor's principal residence if the loan was not used to acquire the property and was primarily used in the business. 11 U.S.C. 1190(3).  Assume that a debtor buys a home in 1990 for $100,000. By 2015, he has paid off the original mortgage and the property has accumulated in value to $1,000,000. The debtor takes out an $800,000 home equity loan and uses the money to purchase a solar powered car wash. That debt could be modified in a case under Subchapter V, but only if the debtor is a sole proprietor.If a plan meets all the requirements for confirmation under 11 U.S.C. 1129(a) other than subsections (8), (10) or (15), it may be confirmed so long as it complies with an alternative test. 11 U.S.C. Sec. 1191.  Subsections (8) and (10) consist of the requirements that a plan be accepted by all impaired classes and that a plan be accepted by at least one impaired class.  Subsection (15) provides that an individual debtor must make payments of disposable income for five years if an unsecured creditor objects to the plan.In place of these requirements, Subchapter V has the following:First, for a secured creditor, the existing rules on cramdown still apply, which means that the debtor must either pay the value of the collateral at a market rate of interest, sell the collateral or provide the creditor with the indubitable equivalent of its lien.Next, the debtor must make payments of projected disposable income for three to five years. Thus, a debtor may complete a plan by paying disposable income to unsecured creditors for as little as three years without satisfying the absolute priority rule.Finally, the debtor must show that there is a reasonable likelihood that it will be able to make the payments and that there are adequate remedies for default.So the tradeoff in Subchapter V is that a debtor does not need to get the votes of any classes of claims and need not meet the absolute priority rule so long as secured creditors get their existing treatment and unsecured creditors receive a minimum of three years of disposable income.On the other hand, discharge does not occur unless the debtor completes its plan payments. 11 U.S.C. Sec. 1192. This is similar to the requirements under chapter 13 and individual chapter 11 plans.Easier Employment of ProfessionalsOne of the more interesting provisions of Subchapter V states that a professional holding a claim of less than $10,000 will be deemed to be disinterested. 11 U.S.C. Sec. 1195. What this does is keeps estate professionals from having to make the Hobson's choice of waiving their pre-petition fees or continuing to represent the debtor.The TrusteeFinally, there is the trustee. Every case must have a trustee. 11 U.S.C. Sec. 1183. The statute provides that the U.S. Trustee can either appoint a standing trustee or appoint an individual in each case. In my U.S. Trustee region, there are a group of individuals who have been approved to serve as trustees and some of us have been receiving appointments. In most cases, the Subchapter V trustee will be responsible for monitoring the case, appearing at hearings and being an advocate for a consensual reorganization. Thus, a trustee has a role as an honest broker and a mediator. If the case is confirmed on a consensual basis, the trustee's service ends. On the other hand, in a cramdown case, the trustee is responsible for distributing all payments unless the parties agree otherwise.  11 U.S.C. Sec. 1194.The trustee is compensated as a professional in the case as opposed to receiving a standard trustee's commission. Under Subchapter V, professionals, including the trustee, can be paid out over time. This eliminates the need for the debtor to make a big payment on the effective date and reflects the common practice in small cases. The trade-off for having to compensate another professional in the case is that U.S. Trustee fees are not payable in Subchapter V cases. In a typical small case, U.S. Trustee fees can run $325-$650 per quarter. While the fees of the Subchapter V trustee will likely be greater than this amount, they can be paid over the life of the plan rather than on a quarterly basis.    SummarySubchapter V is intended to be a fast moving process which makes it easier for debtors to get to confirmation. It is not well suited for a case which requires an extended period for the debtor to stabilize its business or pursue complex litigation. Subchapter V is a grand experiment at making reorganization easier for the smallest cases, and with the enactment of the CARES Act, not so small cases as well.  As a Subchapter V trustee, it is my fervent hope that there will be many cases where my role and my compensation remain limited.Disclaimer:   I have attempted to describe Subchapter V and its pluses and minuses as best I can. However, this is my personal opinion and does not reflect the views of the U.S. Trustee program.  

The Big Bailout Helps If You have to Skip Chapter 13 Payments The big bailout law, just passed, includes some slack for people in Chapter 13. If you can’t make your Chapter 13 payments, we can ask the bankruptcy judge to add up to 24 months to your payment plan. Before that law was passed, […] The post Can’t Make Your Chapter 13 payments? by Robert Weed appeared first on Robert Weed - .

Coronavirus Decimates N.Y.C. Taxi Industry: ‘The Worst It’s Ever Been’There are so few travelers left at Kennedy International Airport, one of the world’s busiest airfields, that taxis wait six hours or more for a single passenger.Taxi companies can no longer find enough drivers for their fleets because there is so little business.And some cabdrivers are so fearful of being exposed to the coronavirus they are staying home with no way to pay mounting bills.All this at a time when many of New York City’s taxi owners are already in financial ruin after taking out reckless loans to buy medallions — city-issued permits required to own a yellow cab — at artificially inflated prices, with the reassurance of the city’s taxi commission of their high value.Their industry has increasingly lost riders to the boom in Uber, Lyft and ride-app services, and been shaken by a spate of suicides by desperate taxi owners and for-hire drivers.Now taxi owners and drivers who were barely holding on said their livelihood had evaporated as the city all but shut down to try to slow the spread of the coronavirus.THE LATEST Read our live coverage of the coronavirus outbreak in the New York area.“When you have to wait six or seven hours to get one passenger, it’s really bad,” said Mario Darius, 66, a taxi owner who was camped out at Kennedy Airport after picking up just three fares in three days.Though citywide taxi ridership numbers for March are not yet available, some taxi companies, cab owners and drivers said their rides had plunged by two-thirds or more.The city’s largest taxi group, the Metropolitan Taxicab Board of Trade, which represents the owners of 5,500 yellow cabs, said rides had dropped nearly 91 percent to a total of 20,596 trips over this past Friday, Saturday and Sunday. That is compared with 217,540 total trips for the same three days three weeks ago.Latest Updates: Coronavirus Outbreak in New YorkWhite House emphasizes how hard New York is being hit.New York police report a drop in crime and a rise in infection among officers.Governor Cuomo becomes the politician of the moment.See more updatesUpdated 15m agoMore live coverage: Global Markets U.S.The New York Taxi Workers Alliance, which represents about 21,000 taxi and ride-app drivers, said a detailed survey of seven members who are taxi drivers found they earned an average of $368 — not including expenses, gas or taxes — from March 15 to March 21, a 71 percent drop from $1,260 two weeks earlier.Bhairavi Desai, the alliance’s executive director, said it had received calls from dozens of taxi drivers who can no longer afford to pay for necessities like groceries and medicine.ImageSome drivers have seen the number of rides drop by more than 90 percent.Some drivers have seen the number of rides drop by more than 90 percent. Credit...Chang W. Lee/The New York Times“They are facing immediate loss of income when they have no savings to fall back on and an uncertain future as to when the economy will begin to recover," she said. “It’s devastating. I thought we had hit a low point already.”Across the country, taxi and ride-app drivers have seen their business all but disappear in cities like San Francisco, where people have been ordered to shelter in place, as well as other communities, including Chicago, Philadelphia, and Washington.Taxi owners need immediate help to survive, Ms. Desai said, including making interest-free city loans available and requiring lenders to partially forgive loans for medallions and temporarily suspend collection of loan payments.And she urged that state unemployment benefits be extended to taxi drivers, who are considered independent contractors and do not qualify.A spokesman for New York City’s Taxi and Limousine Commission, which regulates the for-hire driving industry, said officials were working with the taxi industry and government agencies “on a number of supportive measures” but declined to give any details, saying discussions were ongoing.20-Somethings Now Realizing That They Can Get Coronavirus, TooMarch 23, 2020Density Is New York City’s Big ‘Enemy’ in the Coronavirus FightMarch 23, 2020Gov. Andrew M. Cuomo was seeking federal disaster assistance that would provide unemployment benefits to contract workers, including taxi drivers.The City Council speaker, Corey Johnson, a Democrat who is running for mayor, has proposed a $12 billion relief plan for businesses and workers impacted by the coronavirus — which would cover for-hire drivers. The plan includes expanded unemployment benefits and an immediate payout of $550 to every adult and $275 to every child.“This crisis is unlike anything we’ve ever seen before,” said Mr. Johnson, who has led recent efforts to help the ailing taxi industry. “Every New Yorker is struggling, and for-hire vehicle drivers are among the hardest hit.”A sample pool of 5,533 for-hire drivers in New York City — most of whom work for Uber and other ride apps — found that they drove significantly fewer hours and miles, according to Nexar, a software company that analyzes data from its network of smart dashboard cameras.On March 18, they drove an average of 3 hours and 35 minutes, down 39 percent from 5 hours and 50 minutes on a typical Wednesday. They also covered an average of 48 miles, a 32 percent drop from 71 miles.“This is so massive and so sudden, it’s a shock to the system,” said Eran Shir, Nexar’s co-founder and chief executive officer, who has seen similar drops in other cities. “We’ve never seen anything like that.”Uber and Lyft declined to release their ride numbers in New York.But Uber’s chief executive officer, Dara Khosrowshahi, said in a March 19 call with investors that bookings for rides in Seattle and other hard-hit areas had fallen by as much as 60 to 70 percent.New York City has about 200,000 for-hire drivers licensed by the Taxi and Limousine Commission. The drivers are issued a universal license that allows them to drive yellow taxis, which are capped at nearly 13,600 by the city, and for ride-app services.The commission, which tracks taxi ridership numbers, has only collected data through January, well before coronavirus reached New York.Michael Woloz, a longtime taxi industry consultant, said taxi garages had stayed open through some of the city’s worst crises — including the Sept. 11 terror attacks and Hurricane Sandy — but were reeling from the coronavirus fallout.Many garages, he said, were taking extraordinary steps to get their taxis out on the streets, including reducing leasing fees for drivers by as much as two-thirds.Other garages were waiving leasing fees altogether, and instead waiting until the end of drivers’ shifts to see if there was any profit to split.“Right now, it’s the worst it’s ever been,” Mr. Woloz said.At Kennedy Airport, taxi drivers are stuck in a central holding area for hours before finally being dispatched to pick up passengers at the terminals.The other day, dozens of taxis were lined up, with some drivers talking on their cellphones to pass the time while others leaned back for a nap.Edrice Ulysses, 57, of Brooklyn, pounded on his steering wheel in frustration. “Every day one fare,” he said. ”Eight hours, nine hours, ten hours, one fare.”Marc Petit-Homme, 54, a yellow taxi driver for nearly three decades, said the airport was so slow one day that he finally gave up and drove to Manhattan looking for passengers.But over five hours, he made just $49 — normally, it would be five or 10 times that much.So the next day, he was back at the airport. Waiting. “The last two weeks, we suffer,” said Mr. Petit-Homme, as he paced nervously beside his taxi.Many taxi drivers said their financial worries were compounded by fears of catching the virus and passing it on to their families.Nino Hervias, a taxi owner who is 61 and had pneumonia last year, has not driven his taxi since March 17.Mr. Hervias, who has a loan of more than half-a-million dollars on his medallion, said he cannot make the monthly payments on that or on the mortgage on his family’s home in New Jersey, or even cover their everyday living expenses.“We have food for another two days,’’ he said.Other taxi owners and drivers are taking their chances, armed with hand sanitizer and disinfectant wipes.Wilfred Fequiere, 64, who lives in Queens and has driven a cab for 35 years, said he used to average a dozen passengers a day. Now, it is two passengers, if he is lucky, but sometimes none at all.“Before it wasn’t good,” he said. “Now it’s worse.”

Arizona Bankruptcy Guide: How Often is it Allowed? Unfortunately, financial troubles are not limited. You can go through serious financial problems and get into major debt and think that the worst is behind you. But then you can face the same troubles if you lose a job, get a divorce, become seriously ill or injured, or face other unexpected circumstances. You may file for bankruptcy the first time to help you get the debt relief you need so you can get back on track. But when troubles arise again, you may wonder if you can file for bankruptcy again. Exactly how many times can you file for bankruptcy in Glendale, and how frequently can you file? Here’s what you need to know: Chapter 7 Bankruptcy In Arizona, you can file for Chapter 7 bankruptcy every six years. That time period starts from the date that you first filed for bankruptcy, not the date that it was discharged. That may seem like a long time, but six years goes by very quickly. Even if the appropriate amount of time has passed, you will not automatically be able to file for Chapter 7 bankruptcy near Mesa. You still need to meet the eligibility requirements for filing, which include passing a means test that looks at your income and assets. If you make too much money or have too much in assets, you won’t be able to file. So, if you qualified for Chapter 7 previously but your income has gone up or you have accumulated more assets, you may not be able to qualify now. There are no limits to what you can discharge in a subsequent Chapter 7 bankruptcy in Mesa. That means that if you qualify to file and you have $100,000 in credit card debt you want to discharge, you can discharge the entire amount. And you can continue doing so every six years so long as you continue to qualify to file. Of course, you may have a hard time getting credit to accumulate such a debt if you have that kind of track record, but you have no impediments to filing for bankruptcy in Glendale so long as you pass the means test and the appropriate amount of time has passed. Chapter 13 Bankruptcy There is no time limit in Arizona to when you can file for Chapter 13 bankruptcy after a previous filing. However, a Mesa Chapter 13 bankruptcy filing puts you on a three- to five-year debt repayment plan. So, you aren’t going to file for bankruptcy in the middle of a current bankruptcy repayment plan. That means you would file no sooner than three to five years apart. Know also that continual filing for bankruptcy in Glendale may jeopardize your ability to be approved for a future Chapter 13 bankruptcy. The bankruptcy judge may suspect that you are abusing the bankruptcy system, so you may be asked to provide more information or to defend your assertions more vigorously. The best thing you can do if you need to file for bankruptcy subsequent times is to work closely with an experienced bankruptcy attorney to get guidance on the right steps to take. Your Avondale bankruptcy attorney can help you understand the intricacies of the complex bankruptcy law and what you will need to do to improve your chances of successfully getting the type of debt relief you want. Your Arizona bankruptcy attorney will review the options with you and will help you create the strongest filing to improve your chances of success. Call a Tempe bankruptcy attorney as soon as you start considering bankruptcy as an option. You may not decide to ultimately file, but you can get that early advice to guide your decisions. Glendale bankruptcy attorneys at My AZ Lawyers are ready to help you. Our Phoenix bankruptcy attorneys will help you understand how Chapter 7 or Chapter 13 bankruptcy may help you based on your current financial circumstances and your history. Our goal is to help you get the maximum debt relief possible under the law. We represent clients throughout the Phoenix area. Contact our bankruptcy law office today to schedule a consultation with a bankruptcy lawyer and to start learning about your options. We’re ready to help you whether it’s your first time filing for bankruptcy or your fifth. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: http://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Arizona Bankruptcy Guide: How Often is it Allowed? appeared first on My AZ Lawyers.

Arizona Bankruptcy Guide: How Often is it Allowed? Unfortunately, financial troubles are not limited. You can go through serious financial problems and get into major debt and think that the worst is behind you. But then you can face the same troubles if you lose a job, get a divorce, become seriously ill or injured, or face other unexpected circumstances. You may file for bankruptcy the first time to help you get the debt relief you need so you can get back on track. But when troubles arise again, you may wonder if you can file for bankruptcy again. Exactly how many times can you file for bankruptcy in Glendale, and how frequently can you file? Here’s what you need to know: Chapter 7 Bankruptcy In Arizona, you can file for Chapter 7 bankruptcy every six years. That time period starts from the date that you first filed for bankruptcy, not the date that it was discharged. That may seem like a long time, but six years goes by very quickly. Even if the appropriate amount of time has passed, you will not automatically be able to file for Chapter 7 bankruptcy near Mesa. You still need to meet the eligibility requirements for filing, which include passing a means test that looks at your income and assets. If you make too much money or have too much in assets, you won’t be able to file. So, if you qualified for Chapter 7 previously but your income has gone up or you have accumulated more assets, you may not be able to qualify now. There are no limits to what you can discharge in a subsequent Chapter 7 bankruptcy in Mesa. That means that if you qualify to file and you have $100,000 in credit card debt you want to discharge, you can discharge the entire amount. And you can continue doing so every six years so long as you continue to qualify to file. Of course, you may have a hard time getting credit to accumulate such a debt if you have that kind of track record, but you have no impediments to filing for bankruptcy in Glendale so long as you pass the means test and the appropriate amount of time has passed. Chapter 13 Bankruptcy There is no time limit in Arizona to when you can file for Chapter 13 bankruptcy after a previous filing. However, a Mesa Chapter 13 bankruptcy filing puts you on a three- to five-year debt repayment plan. So, you aren’t going to file for bankruptcy in the middle of a current bankruptcy repayment plan. That means you would file no sooner than three to five years apart. Know also that continual filing for bankruptcy in Glendale may jeopardize your ability to be approved for a future Chapter 13 bankruptcy. The bankruptcy judge may suspect that you are abusing the bankruptcy system, so you may be asked to provide more information or to defend your assertions more vigorously. The best thing you can do if you need to file for bankruptcy subsequent times is to work closely with an experienced bankruptcy attorney to get guidance on the right steps to take. Your Avondale bankruptcy attorney can help you understand the intricacies of the complex bankruptcy law and what you will need to do to improve your chances of successfully getting the type of debt relief you want. Your Arizona bankruptcy attorney will review the options with you and will help you create the strongest filing to improve your chances of success. Call a Tempe bankruptcy attorney as soon as you start considering bankruptcy as an option. You may not decide to ultimately file, but you can get that early advice to guide your decisions. Glendale bankruptcy attorneys at My AZ Lawyers are ready to help you. Our Phoenix bankruptcy attorneys will help you understand how Chapter 7 or Chapter 13 bankruptcy may help you based on your current financial circumstances and your history. Our goal is to help you get the maximum debt relief possible under the law. We represent clients throughout the Phoenix area. Contact our bankruptcy law office today to schedule a consultation with a bankruptcy lawyer and to start learning about your options. We’re ready to help you whether it’s your first time filing for bankruptcy or your fifth. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Arizona Bankruptcy Guide: How Often is it Allowed? appeared first on My AZ Lawyers.

The Bankruptcy Court is Alexandria is Postponing the Trustee Hearings. Because of the corona virus, bankruptcy hearings in Alexandria VA scheduled up through April 10 are postponed. (I’m guessing the rest of April will get postponed, too.) Postponed Until When? There’s no news on when they will be reschedule, or how. Some courts have adopted […] The post Bankruptcy Trustee Hearings Postponed Due to Virus by Robert Weed appeared first on Robert Weed - AE.

The Federal Government is Pausing Foreclosures on Mortgages They Control. Last week the Federal Housing Finance Agency announced a 60 day pause on foreclosures on mortgage loans the government controls. Those are mortgage loans controlled by Fannie Mae or Freddie Mac.  (Fannie and Freddie were government backed, private businesses. The government bailed them out during […] The post Many Foreclosures Get a Virus Hold by Robert Weed appeared first on Robert Weed - AE.

From:Crain's New York BusinessBy: Gwen Everetthttps://www.crainsnewyork.com/coronavirus/banks-waive-mortgage-payments-90-days?utm_source=breaking-news&utm_medium=email&utm_campaign=20200319&utm_content=hero-readmore

Affluent Taxpayers and the Discharge of Taxes in Bankruptcy In these difficult times, many clients have contacted Shenwick& amp; Associates asking  whether they should file forbankruptcy and whether the taxes they owe are dischargeablein bankruptcy. Both bankruptcy law and tax law are codeoriented and the intersection of those two areas of the lawcan create complexity and confusion.  As we have discussed in prior blog posts, “old income” taxesare dischargeable in a Chapter 7 personal bankruptcy filing.The term “old” generally means that the taxes must be morethan 3 years old or more than 3 years must have passedfrom the date of the filing of the debtor’s tax return and thedate of the debtor’s bankruptcy filing (“3 Year Rule”). Thisis a “back of the envelope” analysis for purposes of this blogpost and an actual analysis would include a review of theDebtor’s account transcript from the IRS and an analysis ofthe facts of the case.    In addition to the 3 Year Rule calculation, the bankruptcyattorney must also determine if the debtor attempted toevade or defeat the payment of  taxes  pursuant to section523(a)(1)(c) of the Bankruptcy Code. If the debtor tookaction to evade the payment of taxes, then the taxes are notdischargeable in bankruptcy notwithstanding the fact that thetaxes are old and have met the 3 year rule discussed above. The recent case of  United States v. Harold, No. 16-05041(Bankr. E.D. Mich. 2020) proves an example of actions bya taxpayer/debtor that rise to the level of an attempt to evadetaxes, which result in the taxes not being dischargeable despitethe taxpayer/debtor having met the 3 Year Rule. Dr. Harold (debtor) was a successful medical doctor with anOB/GYN practice. The issue in the case was the discharge of the  federal tax liabilities for 2004 through 2012 and 2014 thatmet the 3 Year Rule. Unless the exception for attempting toevade the payment of taxes applied, the taxes  would bedischarged in Dr. Harold’s bankruptcy filing.  Dr. Harold  grossed approximately $500,000 from her practiceduring the years at issue.  Despite owing taxes, Dr Harold had  an affluent lifestyle: 1. Shepurchased  a new home in 2005 along the Detroit Riverwaterfront,  2. She sent her children to private grade schoolsand high schools,  3. Her children attended private colleges.4. The family took multiple family vacations to Mexico,Alaska, Puerto Rico, Orlando, Washington, D.C., Paris,Las Vegas, Hawaii, and Dubai and 5 the family droveexpensive cars: a Jaguar, a Mercury Mountaineer, twoCadillacs, two Lincolns, a Lexus and a HarleyDavidson motorcycle.In this author's experience, the IRS  will subpoena theDebtor’s bank and credit card statements for the relevantyears to determine what the Debtor spent their money on. The Court found that the facts of the case indicated thather expenditures were voluntary and  demonstrated thatthe Debtor engaged in conduct to evade or defeat thepayment of her tax liabilities for the years 2004-2012and 2014 pursuant to 523(a)(1)(c) of the BankruptcyCode  and the taxes were not dischargeable. The case provides a lesson for  high income earners whofile for bankruptcy and had used their money to purchaseluxury goods or services instead of paying their taxes,the IRS will object to the discharge of their taxes in theirbankruptcy filing  and the IRS will likely prevail.James H. Shenwick, Esq. has an LLM in Taxation fromNYU Law School and counsels many clients with taxand debtor/creditor issues.  James ShenwickShenwick & Associates122 East 42nd StSuite 620New York, NY 10168Bankruptcy & Creditor's Rights“We always appreciate referrals”W 212-541-6224E: jshenwick@gmail.comFax 646-218-4600Cell Phone: 917-363-3391Website: https://shenwick-associates.business.site/Website: https://sites.google.com/site/jshenwick/homeBlog: http://shenwick.blogspot.comLinkedIn:  http://www.linkedin.com/in/jamesshenwick