Bankruptcy Mastery

Becoming a better bankruptcy lawyer

Three Payroll Tax Issues That Can Bite The Unsuspecting

By Filed Under: Bankruptcy Practice

Business bankruptcy cases can lull you into inattention when no payroll tax issues are apparent on the face of the situation. Even the client who  doesn't owe the IRS now can get bitten. [You didn't think this was simple, did you?] W-2's Corporate officers are personally liable for monetary penalties if they fail to give employees their w-2 forms on time. It's easy to miss making … [Continue reading...]

What Bankruptcy Lawyers Must Know About Payroll Taxes

By Filed Under: Bankruptcy Practice

Payroll taxes are dynamite: First, let's get our terms straight.  What we call "payroll taxes" are really several different taxes, FICA, income taxes, etc. In bankruptcy-speak, we are talking about taxes that the employer collects from its employees and transmits to the government.  The employer is merely a conduit for payments by others on their taxes.  They are also called … [Continue reading...]

Bankruptcy Lawyer Sleepless in Silicon Valley

By Filed Under: Bankruptcy Practice

The"Who's On First" problem of lien strip service haunted my weekend at the Sacramento Bankruptcy Forum and the week that has followed back in the office. As one judge so kindly pointed out, if it turns out your service of the lien strip motion was inadequate, it will be the debtor's attorney in the cross hairs. Thanks, judge. Where most bankruptcy issues are relatively small dollar value … [Continue reading...]

Have Your Say About New Bankruptcy Forms

By Filed Under: Bankruptcy Practice

Megaphone

Speak now or forever hold your peace. Or suffer in silence, is more like it. Comment period for the proposed new bankruptcy forms closes February 15th. That's a week from tomorrow. Have you had your say? I've extracted the new I, J, and elements of B22  from the pdf on the court's site to make them easier to find and analyze. Form 6 I Form 6 J Form 22 A 1 Form 22A 2 MT … [Continue reading...]

Sleepless In Sacramento

By Filed Under: Bankruptcy Practice

A really good bankruptcy law conference leaves you unable to sleep the next night. If you don't learn something that scares you sleepless about how you practice, you weren't paying attention. Service of lien strip motions tops my worry list after  last weekend's  Northern California Bankruptcy Conference in Sacramento. Lien strips may be the biggest dollar value thing we do in a Chapter … [Continue reading...]

Taxing Questions In Business Bankruptcy

By Filed Under: Business bankruptcy, Tax

Tax issues in a failing business can feel like a maze to the bankruptcy lawyer.  Towering walls and no vision of the path forward. Let's break down the components and see how that influences the choice of chapter and the decision about who files the bankruptcy case. Types of taxes Start by identifying the kinds of taxes the business may have incurred. IncomePayrollSalesPersonal … [Continue reading...]

What Does Good Lawyering Cost?

By Filed Under: Bankruptcy Practice

Ms. Moran, how could this bankruptcy case have cost as much as your fee application asks? That's the harping voice in the back of my head as I write fee applications. That's the question that my written application had better answer before I step to the lectern in a courtroom. It's impolitic to say my client's an idiot or the records are a shambles,  or the law was written by random … [Continue reading...]

Is The Debtor Lost In Space?

By Filed Under: Bankruptcy Practice

Business bankruptcy skills, continued. The business lease often stands at the center of the troubles of a struggling business.  Ask the right questions, or better yet, read the document yourself, and you can outline choices for your client. There's no straight line through this topic, so let's head off. Who is lessee? Even when the business is operated by a corporation, the lessee on the … [Continue reading...]

Corporate Chapter 7: The Other Side Of The Coin

By Filed Under: Bankruptcy Practice

The reasons not to file a Chapter 7 for a failing corporation crowded my last post. My point was that just because the person in your office thinks his corporation should file bankruptcy, it may not be so. Today: the situations where it might be worth the downside risks to file a 7 for a client's corporation. Because, like most issues in advising real people, corporate and corporeal, it … [Continue reading...]

Four Dangers In Bankrupting A Corporation

By Filed Under: Bankruptcy Practice

If the whole point in bankruptcy is getting a discharge of your debts, it's obvious why corporations don't need Chapter 7 filings: Corporations don't get discharges. (a) The court shall grant the debtor a discharge, unless— (1) the debtor is not an individual; § 727 Chapter 7 is so closely associated with financial failure and finality that you often interview a client who thinks bankruptcy is … [Continue reading...]

Is Your Bankruptcy Client’s Business Worth Saving?

By Filed Under: Bankruptcy Practice

Your client's business is going under. What should I do? he asks of you. Return the favor with a question of your own, the third in my trio of gating inquiries: Would the business outlook be better if you weren’t servicing debt from the past? Fight or flee Before you can craft a plan, you need to assess the underlying problem in the business. There is no bankruptcy remedy for a poor product, an … [Continue reading...]

Who Is On The Hook For Debts?

By Filed Under: Bankruptcy Practice

When the person sitting in your office runs a struggling business, I proposed three initial questions to scope out the bankruptcy options available.  (The first question.) The second question  applies only if the business is operated by an entity ( a corporation or an LLC) How much of the debt it services is the entity really liable for? Dig a bit and you will often find that the corporation … [Continue reading...]