Occasionally, following the the filing of a Chapter 13 bankruptcy and while the case is still pending, particularly in cases where the Debtor owes a pre-petition tax obligation to the Internal Revenue Service, tax refunds ordinarily due to the Debtor will be intercepted by the agency and applied against the Debtor’s federal tax obligations. Should this occur, the Debtor obviously should immediately contact his or her Counsel. Ultimately, the Debtor should demand that the Internal Revenue Service amend their Proof of Claim as originally filed. The Debtor may also need to file an Amended Chapter 13 Plan.
Questions arise as to whether conduct of this nature by the Internal Revenue Service comprises a violation of the Automatic Stay imposed by 11 U.S.C. Section 362(a). Due to new Section 362(b)(26), said conduct may or may not be a violation of the Automatic Stay. However, Debtors should inquire with their Counsel as to whether the Order of Confirmation has been violated under these circumstances.
Bankruptcy Law Network (BLN)
Latest posts by Bankruptcy Law Network (BLN) (see all)
- New Judge for Southern District of Texas – David R. Jones - August 19, 2011
- Limited Emergency Efforts to Save Homes Continue - June 30, 2011
- Why Run Your Company Into The Ground? - June 6, 2011
- New U.S. Trustee for Texas – Region 7 - October 2, 2010
- Is Chapter 13 An Option For A Small Corporation Or A Limited Liability Corporation (LLC)? - September 29, 2010
Last modified: December 15, 2009