Useful Info - Case Law Update (PDF)
I found this really informational; I wanted to know what some recent findings of bankruptcy courts were..
http://practicelaw.org/bankruptcy/CaseLawUpdate.pdf
of particular interest to me:
http://practicelaw.org/bankruptcy/CaseLawUpdate.pdf
of particular interest to me:
6. TAX REFUND EXEMPT AS NOT SUBJECT TO ATTACHMENT OR EXECUTION
Benn v. Cole (In re Benn), 340 B.R. 905 (8th Cir. BAP (Mo.) 4/6/06) (Mahoney, J.)
A divided Eight Circuit BAP reverses the Missouri bankruptcy court's order overruling debtor's claim of exemption for federal and state tax refunds. Missouri has opted out of the "federal" exemptions, and in the opt-out provisions states that a debtor may exempt any property that is not "subject to attachment and execution" under Missouri or federal law. Missouri law does not expressly exempt tax refunds. Missouri case law provides that a contingent interest cannot be attached. Two of the three judges on the BAP panel find that the case was filed before the end of the tax year and the refunds were "contingent," so under the above law, they could not be attached. The majority also concludes that the refunds were not subject to execution due to Internal Revenue Code provisions prohibiting payment to a third party. The majority concludes that the Missouri exemption statute is intended to treat a bankruptcy debtor just like a nonbankruptcy debtor, and the refunds unavailable to creditors outside of bankruptcy were also exempt in the bankruptcy.
Benn v. Cole (In re Benn), 340 B.R. 905 (8th Cir. BAP (Mo.) 4/6/06) (Mahoney, J.)
A divided Eight Circuit BAP reverses the Missouri bankruptcy court's order overruling debtor's claim of exemption for federal and state tax refunds. Missouri has opted out of the "federal" exemptions, and in the opt-out provisions states that a debtor may exempt any property that is not "subject to attachment and execution" under Missouri or federal law. Missouri law does not expressly exempt tax refunds. Missouri case law provides that a contingent interest cannot be attached. Two of the three judges on the BAP panel find that the case was filed before the end of the tax year and the refunds were "contingent," so under the above law, they could not be attached. The majority also concludes that the refunds were not subject to execution due to Internal Revenue Code provisions prohibiting payment to a third party. The majority concludes that the Missouri exemption statute is intended to treat a bankruptcy debtor just like a nonbankruptcy debtor, and the refunds unavailable to creditors outside of bankruptcy were also exempt in the bankruptcy.
