Why Did I Receive a 1099?

February 1, 2017

A common question we receive as bankruptcy attorneys at this point in the year is, “why did I receive a 1099 and what does it mean?”

There are two types of 1099 forms that are commonly received.  The first is a 1099-A.  This is not a cause for concern.  It may be issued by a creditor who held a debt, such as a mortgage debt, because they are required to file the form with the IRS to reflect it has acquired your property.  This is a purely informational return that is given to the IRS.  It does not mean you have any liability.

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State Court Appointed Receivers and the WARN Act

January 27, 2017

Does a receiver have an obligation to comply with Worker Adjustment and Retraining Notification (“WARN”) Act, 29 U.S.C. § 2101-2109? The short answer is no. While no Michigan state court has addressed this specific issue, the federal courts have addressed it in the context of reorganizing and liquidating failed banks. The courts have consistently and unanimously held that the WARN Act does not apply to receivers appointed to reorganize or liquidate a failed bank. In reaching this conclusion, the courts agree that a receiver is not an “employer” under the WARN Act, and therefore, the receiver is not required to provide notice as proscribed by the WARN Act.

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How often can you file for bankruptcy?

January 17, 2017

When considering bankruptcy, it is important to consider the timing of any prior bankruptcy that you may have filed.  The timing of any previous bankruptcy can affect whether you are currently eligible to file another case, or potentially even whether the protection of the bankruptcy stay would apply to your new case filing. 

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Defaulting on your SBA loan

January 11, 2016

SBA Loan
According to SBA.gov, Small Business Administrative loans may be an option for individuals wishing to start or expand a business who are in need of financing help.  While the loan itself is financed through your local participating bank or lending institution, the SBA guarantees the loan.  In the event you should default on your SBA loan, the risk to the lender is minimized but you, the borrower, remain obligated on the debt.

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Non-Filing Spouses in Bankruptcy

January 9, 2017

A common question when considering bankruptcy is, “How will filing a bankruptcy affect my spouse?”  In many cases it might be in your best interest that only one spouse file a bankruptcy.  In other cases, it may benefit both spouses to file.  It often depends on the nature of your debt and property ownership. 

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Chapter 7 Bankruptcy and Protecting Your Tax Refund

December 29, 2016

When you file a chapter 7 bankruptcy, you are required to disclose your ownership or interest of any kind in property.  These interests are then listed on your bankruptcy papers that are filed with the Court.  When a chapter 7 is filed, a Trustee is appointed to review and administer your case.  One of the Trustee’s responsibilities is to review the property listed on your bankruptcy papers to determine whether any funds might be available for creditors.

taxes 806396 1280

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Is the Prepetition Assignment of Rent Property of the Debtor’s Bankruptcy Estate?

December 22, 2016

When a bankruptcy case that involves commercial property, a question that often becomes a key issue is whether an assignment of rent is property of the bankruptcy estate. Most of the bankruptcy rulings in Michigan have held that prepetition assignment of rent remains property of the Debtor’s bankruptcy estate. See In re Newberry Square, 175 BR 910 (Bankr ED Mich, 1994). This issue can turn on whether the controlling state law follows a lien theory or title theory for mortgages. See In re Builders Group & Dev. Corp., 502 BR 95, 109 (Bankr. DPR, 2013). Michigan, like a majority of states, follows the lien theory and as a result case law in Michigan bankruptcy matters have found that prepetition assignment of rent remains property of the estate.

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