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PRO BONO CHAPTER 7 BANKRUPTCY FOR SENIORS AND THE DISABLED

PANELISTS

Michael Fuller, Esq.

OlsenDaines Portland, Oregon

Shatorree Bates, Esq.

Bates Law Firm, LLC Atlanta, Georgia

Materials by:

Michael Fuller, Esq.

ABA YLD Midyear Conference Atlanta, GA, Hyatt Regency Friday, February 11, 2011 at 8:45 a.m.

PRESENTATION OUTLINE

Introduction

I. Non-Bankruptcy Options

  • A. Tax Consequences of Settlement Offers

  • B. Debt Management Companies

  • C. “Represented” Debtors and the Fair Debt Collection Practices Act

  • D. Reverse Mortgages

  • E. IRS Offers in Compromise

II. Obtaining a Chapter 7 Filing Fee Waiver

  • A. Relevant Law

  • B. Household Income Limit

III. Obtaining a Credit Counseling Class Waiver

IV. Motion for Appointment of Next Friend

V. Bankruptcy Petition Basics for Seniors and the Disabled

  • A. Form 1. Voluntary Petition

  • B. Form 8. Statement of Intention

  • C. Schedules

  • D. Form 7. Statement of Financial Affairs

  • E. Form 22A. Means Test

Appendix: Sample Forms and Letters

  • A. Sample Representation Letter

  • B. Relevant IRS forms

  • C. Form B 3B

  • D. DHHS Poverty Guidelines Table 2010

  • E. Sample Motion to Appoint Next Friend

ABOUT THE PANELISTS

Michael Fuller practices consumer rights litigation and bankruptcy law at OlsenDaines in Portland, Oregon. He joined the Oregon State Bar in 2009 and regularly files pro bono chapter 7 bankruptcies.

Shatorree Bates practices bankruptcy, business and family law at Bates Law Firm, LLC in Atlanta, Georgia and was admitted to the State Bar of Georgia in 2008. Her bankruptcy clients include consumer and small business debtors, creditors and trustees.

PROGRAM MATERIALS

I. Non-Bankruptcy Options

The first step in providing advice to most seniors and disabled clients is determining whether chapter 7

bankruptcy will benefit them. Many of these clients are judgment-proof and do not need to file.

  • A. Tax Consequences of Settlement Offers

Settling debts may be appropriate for debtors with non-exempt assets and a small amount of creditors

or debt. However, adverse tax consequences should also be considered when negotiating settlements.

  • 1. IRC §108 and Form 982 – Forgiveness or Cancellation of Debt Income

The IRS generally counts forgiven debt as taxable income. Creditors will often provide debtors with a Form 1099-C as part of a settlement offer where less than the full amount owed is accepted.

i. Foreclosure Exception

An exception exists for forgiveness of debt resulting from foreclosure of a qualified principal residence. The foreclosure must occur before Dec. 31, 2013, and the debt must be less than $1,000,000 ($2,000,000 if married).

ii. Insolvency Exception

Insolvent debtors whose total debts are larger than the value of all their assets also qualify for the exception. Note that exempt assets count in the calculation of solvency, including retirement accounts.

iii. Bankruptcy Exception

Debt forgiven or canceled due to a bankruptcy filing is also exempt from taxable income.

  • B. Debt Management Companies

Debt management companies provide little or no benefit to most debtors. Occasionally a debtor with

only one or two creditors may benefit by hiring outside professionals to negotiate settlements. However, debtors may negotiate the settlements themselves and avoid potential up-front fees and fly- by-night con artists posing as legitimate companies.

  • C. “Represented” Debtors and the Fair Debt Collection Practices Act (“FDCPA”)

The FDCPA (codified at 15 USC §1692) provides protection to debtors represented by counsel. Many seniors and disabled debtors who do not want to file bankruptcy or are not good candidates for bankruptcy at a given point in time may still benefit by forming an attorney-client relationship.

After a debtor tells a debt collector they are represented by an attorney, the debt collector can no longer contact the debtor or third parties. (15 USC §1692b(6); §1692c(a)(2))

During the period of representation, debtor's counsel must respond to the debt collector within a reasonable amount of time. See Appendix A: Sample Representation Letter.

  • D. Reverse Mortgages

A debtor who is judgment-proof but-for non-exempt equity in their home may seek to obtain a reverse

mortgage and avoid bankruptcy.

  • 1. HUD Home Equity Conversion Mortgages

HUD's reverse mortgage program generally requires a homeowner be 62 or older and live in a single

family residence or up to four unit home (condos and manufactured homes sometimes qualify). Repayment of the loan is required upon homeowner's death, sale of the home, or if the homeowner fails to occupy the home for more than 12 months. HECM Counselors are available at (800) 569-4287.

  • E. IRS Offers in Compromise (“OIC”)

Clients whose primary debts are federal income taxes may seek to avoid bankruptcy and resolve their tax debt through an OIC. The OIC form requires debtors to select their reason for applying, either because there is doubt as to the collectability of the taxes, or to serve the interests of effective tax administration. A lump sum offer of 20% of the total offer must be attached to the OIC. The debtor may elect to pay the remaining payments in five installments. See Appendix B: IRS Form 656.

II. Obtaining a Chapter 7 Filing Fee Waiver

  • A. Relevant Law

  • 28 USC §1930(f)(1-3) governs the waiver of bankruptcy filing fees. The debtor must attach Official

Form 3B to their petition upon filing. See Appendix C: Form B 3B.

  • B. Household Income Limit

The debtor's household income on Schedule I Line 16 must be less than 150% of the income official

poverty line. See Appendix D: DHHS Poverty Guidelines Table 2010.

For the purposes of determining household income for the fee waiver, debtors should exclude non-cash govt assistance (ie, food stamps, housing subsidies, etc.). The 2010 poverty guideline for a household of two is $14,570, or, multiplied by 150% and divided by 12, $1,821/mo.

To qualify for the full fee waiver, the debtor must be unable to pay the fee in installments. This may be shown by providing a negative net monthly income on Schedules I and J. Courts may use a totality of the circumstances standard to determine whether a debtor may waive other filing fees imposed under

  • 28 USC § 1930(b) and (c).

III. Obtaining a Credit Counseling Class Waiver

Generally, a debtor must complete a briefing from an approved credit counseling agency within the 180 days prior to filing, pursuant to 11 USC §109(h). The class may now be completed on the day the petition is filed, pursuant to the Bankruptcy Technical Corrections Act of 2010.

Seniors or disabled debtors should contact an approved agency and request a fee waiver. A debtor may provide prepared Schedules I and J to show financial hardship. Agencies are required to provide the class regardless of ability to pay the fee, pursuant to 11 USC §111(d)(1)(E).

If a debtor is unable to obtain the class certificate free of charge, consider submitting a certification to the Court in lieu of the class certificate. The certification should describe exigent circumstances that merit waiver of the class requirement, and state that the debtor requested the class from an approved agency and was unable to obtain the certificate within seven days, pursuant to 11 USC §109(h)(3)(A).

For debtors with mental or physical impairments that do not allow them to complete the class, consider a waiver under 11 USC §109(h)(4).

IV. Motion for Appointment of Next Friend

Seniors and disabled debtors unable to attend the meeting of creditors due to mental incapacity may

appoint a “next friend” under Federal Rule of Bankruptcy Procedure 1004.1. See Appendix E: Sample Motion to Appoint Next Friend.

V. Bankruptcy Petition Basics for Seniors and the Disabled

  • A. Form 1. Voluntary Petition

    • 1. Consumer vs. Business Debts and the Means Test

Debtors with primarily business debts are not subject to the means test or dismissal under 11 USC §707(b). Seniors or disabled debtors who own rental properties are most likely to have primarily business debts. In States with anti-deficiency statutes prohibiting collection of certain mortgages foreclosed by trust deed, counsel should note whether filing before foreclosure would affect the consumer debt versus business debt ratio.

  • 2. Prior Bankruptcies and Discharge

Pursuant to 11 USC §727(a)(8) and (9), debtors cannot receive a discharge of their debts in chapter 7 bankruptcy if they received a discharge in chapter 7 within the past eight years, or a discharge in a

chapter 13 within the past six years.

11 USC §727(a)(9)(A) provides an exception to debtors who received a chapter 13 discharge within the past six years if the debtors paid 100% of their unsecured creditors, or if debtors paid 70% of unsecured creditors, and proposed their plan in good faith and made their best efforts to repay creditors.

  • 3. Venue State

Pursuant to 28 USC §1408, a petition should be filed in the District Court for the District in which the debtor resided (or maintained domicile or principle place of business) for the majority of the 180 day period prior to filing.

  • B. Form 8. Statement of Intention

Pursuant to 11 USC §521(a)(2)(A), debtors must file a statement of intention, stating whether they intend to reaffirm, redeem, or surrender debts secured by property of the estate.

Prior to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), debtors in the Second, Third, Fourth, Ninth, and Tenth Circuits could retain secured collateral without entering reaffirmation agreements. After BAPCPA, debtors in all Circuits risk repossession under an ipso facto clause unless they state their intent to reaffirm and enter a reaffirmation agreement within 30 days after their meeting of creditors.

Debtors may also elect to redeem property by paying the secured creditor the value of the collateral.

The BAPCPA amendments do not require debtors to reaffirm real property, and there is little advantage to entering reaffirmation agreements on mortgages unless the lender offers significantly better loan terms.

  • C. Schedules

    • 1. Sch. C Exemptions

To avoid forum shopping, the Code designates which States' exemptions a debtor may use on Schedule C. Some State exemption laws allow debtors to use the federal exemptions, which are found in the

Code at 11 USC §522(d).

Pursuant to 11 USC §522(b)(3)(A), debtors shall use the exemptions of the State that has been their domicile for the two year period prior to filing. If debtors maintained domicile in more than one State in the two years prior to filing, they must use the exemptions for the State in which they maintained domicile for the majority of the 180 days prior to the two year period.

  • 2. Sch. E Priority Debts

Priority debts are enumerated at 11 USC §507(a), and should be listed on the petition at Schedule E. If

there are non-exempt assets of the estate, the panel trustee shall pay priority debts in full before distributing any funds to general unsecured creditors.

Pursuant to 11 USC §507(a)(8), taxes are priority (and non-dischargeable pursuant to 11 USC §523(a) (1)(A)) unless they have been assessed and owed for at least three years, and returns were filed by the debtor at least years years prior to filing a bankruptcy petition.

The above-referenced time periods toll during OIC's and pending bankruptcies. An experienced bankruptcy attorney may be required to properly analyze a debtor's tax transcripts in complex cases.

  • D. Form 7. Statement of Financial Affairs

The Statement of Financial Affairs (“SOFA”) is a list of 25 questions debtors are required to answer.

Most of the questions will not pertain to seniors and disabled debtors.

  • 1. SOFA #2: List unemployment, disability, pension, social security, etc.

SOFA #2 asks for income other than from employment or operation of a business. Depending on local practice in each District, debtors may want to include cash and non-cash benefits, including rent assistance, food stamps, unemployment, disability, pension, social security, and other government benefits.

  • 2. SOFA #3: Watch for Preferences

Unsophisticated debtors often believe paying off family and friends prior to filing bankruptcy will “keep them out of it.” SOFA #3 requires debtors list all payments to creditors who are “insiders” made within the year prior to filing.

Payments listed on SOFA #3 may be reversed by the panel trustee. Waiting to file until payments to insiders are over a year old may benefit the “insider” creditor and make life easier on the debtor.

  • 3. SOFA #9: Should be Blank

A pro bono case should not list any payments on SOFA #9.

  • 4. SOFA #10: Transfers and Fraudulent Conveyances

All transfers outside the ordinary course of business of the debtor within two years prior to the filing date must be listed on SOFA #4. The panel trustee may reverse transfers within the two year period pursuant to 11 USC §547, if the debtor's intent was to defraud creditors, or if the debtor received less

than fair market value in exchange for the transfer.

  • 11 USC §544(b) allows the panel trustee to avoid transfers that any unsecured creditor may avoid under

State law. The Uniform Fraudulent Transfer Act (“UFTA”) generally imposes a four year statute of limitations on actions to reverse fraudulent transfers. Be sure to check your State's codification of the UFTA and ensure your client has not transferred property that may be reversed by the trustee under §544(b) or §547.

E. Form 22A. Means Test

  • 11 USC §707 explains the requirements of the means test, which will not be covered, as most seniors

and disabled chapter 7 debtors earn below their state's median average income.

For below-median debtors, average all household income for the six month period prior to the month the petition is filed and enter the numbers on Form 22A. The means test does not count social security benefits. Districts vary as to whether unemployment must be counted.

Debtors with primarily business debt need not complete the means test.

Appendix: Sample Forms and Letters

  • A. Sample Representation Letter

  • B. Relevant IRS forms

  • C. Form B 3B

  • D. DHHS Poverty Guidelines Table 2010

  • E. Sample Motion to Appoint Next Friend

Attorneys

Eric W. Olsen* Lars H. Olsen Rex K. Daines* Kevin D. Swartz* Keith D. Karnes* D. Neal Peton Matthew A. Casper Michael Fuller Aaron B. Rabiroff Andrea Breinholt Michael Sperry Hyrum Zeyer Dwayne R. Murray** Patrick D. McBurney**

* Licensed In Oregon & Washington ** Of Counsel

Correspondence

PO Box 12829 Salem, OR 97309

Phone

Albany 541-928-9242 Bend 541-330-5044 Coos Bay 541-267-7546 Eugene 541-683-4268 Grants Pass 541-471-1043 Klamath Falls 541-880-0545 Medford 541-770-5731 Port Orchard 360-871-0227 Portland Area 503-274-4252 Roseburg 541-672-2016 Salem 503-362-9393 Tacoma 253-383-3386 Tri-Cities 509-783-3381 Vancouver 360-735 5998 Yakima 509-853-1192

Fax

503-362-1375

800-258-3518

Email

webinfo@olsendaines.com

Website

www.olsendaines.com

Attorneys Eric W. Olsen* Lars H. Olsen Rex K. Daines* Kevin D. Swartz* Keith D. Karnes*johndoe@hotmail.com PAGE 1 OF 1 " id="pdf-obj-8-30" src="pdf-obj-8-30.jpg">

Michael Fuller

mfuller@olsendaines.com

DELIVERED VIA FACSIMILE AND FIRST CLASS MAIL

November 12, 2010

Suttell and Hammer, P.S. 1450-114 th Ave SE, #240 Bellevue, WA 98004

Fax: (425) 454-7884

RE: Notice of Representation

Capital One. v. Doe Account No. 3333-3333-3333-3333

Ladies and Gentlemen:

I represent the Does and will be filing a bankruptcy for them shortly. This letter serves as a courtesy to you and your client, in an attempt to avoid unnecessary fees and costs in pursuing the above-mentioned action.

Please advise your client that collection at this time will likely prove ineffective. Any garnishment from this time forward will likely result in a reversible preferential payment because my client is insolvent and would entitle your client to more than they would receive as a creditor in a chapter 7 proceeding. See generally 11 U.S.C. § 547.

Please also note that my client's income is wholly exempt, and their assets have no non- exempt equity. Feel free to call me with any questions. Thank you.

Sincerely,

Michael R. Fuller Attorney at Law

PAGE 1 OF 1

Form 656

               

Department of the Treasury — Internal Revenue Service

         

(March 2009)

                 

Offer in Compromise

         
   

Attach Application Fee and Payment (check or money order) here.

     

IRS RECEIVED DATE

Section I

       

Taxpayer Contact Information

                     

Taxpayer’s First Name and Middle Initial

     

Last Name

                     
           

If a joint offer, spouse’s First Name and Middle Initial

Last Name

                     
           

Business Name

           

Taxpayers Address (Home and Business) (number, street, and room or suite no., city, state, ZIP code)

               
           

Mailing Address (if different from above) (number, street, and room or suite no., city, state, ZIP code)

 

DATE RETURNED

 

Social Security Number (SSN)

             

Employer Identification Number (EIN)

           

(Primary)

         

(Secondary)

     

(EIN included in offer)

   

(EIN not included in offer)

 
 

-

-

 

-

-

 

-

 

-

 

Section II

               

To: Commissioner of Internal Revenue Service

           

I/We (includes all types of taxpayers) submit this offer to compromise the tax liabilities plus any interest, penalties, additions to tax, and additional amounts

required by law (tax liability) for the tax type and period marked below: (Please mark an “X” in the box for the correct description and fill-in the correct tax period(s), adding additional periods if needed).

1040/1120 Income Tax - Year(s)

941

Employer's Quarterly Federal Tax Return - Quarterly period(s)

 

940

Employer’s Annual Federal Unemployment (FUTA) Tax Return — Year(s)

Trust Fund Recovery Penalty as a responsible person of (enter corporation name)

 

for failure to pay withholding and Federal Insurance Contributions Act taxes (Social Security taxes), for period(s) ending

,

 

Other Federal Tax(es) [specify type(s) and period(s)]

Note: If you need more space, use a separate sheet of paper and title it “Attachment to Form 656 Dated

. Sign and date the

attachment following the listing of the tax periods.

           

Section III

                 

Reason for Offer in Compromise

             

I/We submit this offer for the reason(s) checked below:

                         

Doubt as to Collectibility — “I have insufficient assets and income to pay the full amount.” You must include a complete Collection Information

 

Statement, Form 433-A and/or Form 433-B.

                         

Effective Tax Administration — “I owe this amount and have sufficient assets to pay the full amount, but due to my exceptional circumstances,

 

requiring full payment would cause an economic hardship or would be unfair and inequitable.” You must include a complete Collection Information Statement, Form 433-A and/or Form 433-B and complete Section VI.

Section IV

               

Offer in Compromise Terms

               

I/We offer to pay $

(must be more than zero). Complete Section VII to explain where you will obtain the funds to make this offer.

Check only one of the following:

                                 

Lump sum cash offer 20% of the amount of the offer $

must be sent with Form 656. Upon written acceptance of the offer,

 

the balance must be paid in 5 or fewer installments.

                       
 

$

payable within

months after acceptance

                   
 

$

$

$

$

payable within

payable within

payable within

payable within

months after acceptance

months after acceptance

months after acceptance

months after acceptance

                   

Short Term Periodic Payment Offer - Offer amount is paid within 24 months from the date IRS received your offer. The first payment must be

 

submitted with your Form 656. You must make regular payments during your offer investigation. Complete the following:

   
 

$

will be submitted with the Form 656. Beginning in the month after the offer is submitted (insert month

), on the

 

day of each month, $

will be sent in for a total of

months. (Cannot extend more than 24 months from the date

the offer was submitted.)

Page 2 of 4

Section IV Cont.

 

Section V

By submitting this offer, I/we have read, understand and agree to the following conditions:

Deferred Periodic Payment Offer – Offer amount will be paid over the remaining life of the collection statute. The first payment must be

 
 

submitted with your Form 656. You must make regular payments during your offer investigation. Complete the following:

   
 

$

will be submitted with the Form 656. Beginning in the month after the offer is submitted (insert month

), on the

 

day of each month, $

will be sent in for a total of

months.

   

Optional - Designation of Required Payment under IRC 7122(c)

           

You have the option to designate the required payment you made under Section IV above. If you choose not to designate your required payment, then the IRS will apply your payment in the best interest of the government. If the required payment is not paid, the offer will be returned even if you make a payment you designated as a deposit. Please complete the following if you choose to designate your payment:

$

paid under IRC 7122 (c) is to be applied to my

Tax Year/Quarter(s) (whichever is applicable) for my/our tax

 
 

form

.

                   

If you pay more than the required payment when you submit your offer and want any part of that additional payment treated as a deposit, check the box below and insert the amount. It is not required that you designate any portion of your payment as a deposit.

 

I am making a deposit of $

with this offer.

           
  • (a) I/We voluntarily submit all tax payments made on this offer,

including the mandatory payments of tax required under section 7122(c). These tax payments are not refundable even if I/we withdraw the offer prior to acceptance or the IRS returns or rejects the offer. If the offer is accepted, the IRS will apply payments made after acceptance in the best interest of the government.

  • (b) Any payments made in connection with this offer will be

applied to the tax liability unless I have specified that they be

treated as a deposit. Only amounts that exceed the mandatory payments can be treated as a deposit. Such a deposit will be refundable if the offer is rejected or returned by the IRS or is withdrawn. I/we understand that the IRS will not pay interest on any deposit.

  • (c) The application fee for this offer will be kept by the

IRS unless the offer was not accepted for processing.

  • (d) I/We will comply with all provisions of the Internal Revenue

Code relating to filing my/our returns and paying my/our required taxes for 5 years or until the offered amount is paid in full, whichever is longer. In the case of a jointly submitted Offer in Compromise of joint liabilities, I/we understand that default with respect to the compliance provisions described in this paragraph by one party to this agreement will not result in the default of the entire agreement. The default provisions described in Section V(i) of this agreement will be applied only to the party failing to comply with the requirements of this paragraph.

  • (e) I/We waive and agree to the suspension of any statutory

periods of limitation (time limits provided by law) for the IRS assessment of the liability for the periods identified in Section II. I/We understand that I/we have the right not to waive these statutory periods or to limit the waiver to a certain length or to certain periods. I/we understand, however, that the IRS may not consider this offer if I/we refuse to waive the statutory periods for assessment or if we provide only a limited waiver. The amount of any Federal tax due for the periods described in Section II may be assessed at any time prior to the acceptance of this offer or within one year of the rejection of this offer. I/We understand that the statute of limitations for collection will be suspended during the period an offer is considered pending by the IRS (paragraph (k) of this section defines pending).

  • (f) The IRS will keep all payments and credits made, received

or applied to the total original liability before submission of this offer and all payments required under section 7122(c). The IRS will also keep all payments in excess of those required by section 7122(c) that are received in connection with the offer and that are not designated as deposits in Section IV. The IRS may keep any proceeds from a levy served prior to submission of the offer, but not received at the time the offer is submitted. As additional consideration beyond the amount of my/our offer, the IRS will keep any refund, including interest, due to me/us because of overpayment of any tax or

other liability, for tax periods extending through the calendar year in which the IRS accepts the offer. The date of acceptance is the date on the written notice of acceptance issued by the IRS to me/us or to my/our representative. I/We may not designate an overpayment ordinarily subject to refund, to which the IRS is entitled, to be applied to estimated tax payments for the following year.

  • (g) I/We will return to the IRS any refund identified in

paragraph (f) received after submission of this offer.

  • (h) The IRS cannot collect more than the full amount of

the liability under this offer.

  • (i) I/We understand that I/we remain responsible for the full

amount of the liabilities, unless and until the IRS accepts the offer in writing and I/we have met all the terms and conditions of the offer. The IRS will not remove the original amount of the liabilities from its records until I/we have met all the terms and conditions of the offer. I/we understand that the liabilities I/we offer to compromise are and will remain liabilities until I/we meet all the terms and conditions of this offer. If I/we file for bankruptcy before the terms and conditions of this offer are completed, any claim the IRS files in the bankruptcy proceedings will be a tax claim.

  • (j) Once the IRS accepts the offer in writing, I/we have

no right to contest, in court or otherwise, the amount of

the liability.

  • (k) The offer is pending starting with the date an authorized

IRS official signs the form. The offer remains pending until an authorized IRS official accepts, rejects, returns or acknowledges withdrawal of the offer in writing. If I/we appeal an IRS rejection decision on the offer, the IRS will continue to treat the offer as pending until the Appeals Office accepts or rejects the offer in writing.

Page 3 of 4

If I/we don’t file a protest within 30 days of the date the IRS notifies me/us of the right to protest the decision, I/we waive the right to a hearing before the Appeals Office about the Offer in Compromise.

(l) If I/we fail to meet any of the terms and conditions of the offer and the offer defaults, the IRS may:

• immediately file suit to collect the entire unpaid balance of the offer;

• immediately file suit to collect an amount equal to the original amount of the liability, minus any payment already received under the terms of this offer;

• disregard the amount of the offer and apply all amounts already paid under the offer against the original amount of the liability; and/or

• file suit or levy to collect the original amount of the liability, without further notice of any kind.

The IRS will continue to add interest, as section 6601 of the Internal Revenue Code requires, on the amount the IRS determines is due after default. The IRS will add interest from the date the offer is defaulted until I/we completely satisfy the amount owed.

(m) The IRS generally files a Notice of Federal Tax Lien to protect the Government’s interest on offers with deferred payments. Also, the IRS may file a Notice of Federal Tax Lien during the offer investigation. This tax lien will be released when the payment terms of the offer agreement have been satisfied.

  • (n) I/We understand that IRS employees may contact third

parties in order to respond to this request and I/we authorize

the IRS to make such contacts. Further, by authorizing the IRS to contact third parties, I/we understand that I/we will not receive notice, pursuant to section 7602(c) of the Internal Revenue Code, of third parties contacted in connection with this request.

  • (o) I/We are offering to compromise all the liabilities assessed

against me/us as of the date of this offer and under the

taxpayer identification numbers listed in Section II above. I/We authorize the IRS to amend Section II, above, to include any assessed liabilities we failed to list on Form 656.

Section VI

Explanation of Circumstances

  • I am requesting an Offer in Compromise for the reason(s) listed below:

Note: If you believe you have special circumstances affecting your ability to fully pay the amount due, explain your situation. You may attach additional sheets if necessary. Please include your name and SSN or EIN on all additional sheets or supporting documentation.

   

Section VII

Source of Funds

I

/ We shall obtain the funds to make this offer from the following source(s):

Page 4 of 4

Section VIll

Mandatory Signatures

 

If I / we submit this offer on a substitute form, I/ we affirm that this form is a verbatim duplicate of the official Form 656, and I/we agree to be bound by all the terms and conditions set forth in the official Form 656.

 

Under penalties of perjury, I declare that I have examined this offer, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct and complete.

Taxpayer

Signature of Taxpayer

   

Daytime Telephone Number

   

Date (mmddyyyy)

   

Attestation

     

(

)

 

Date (mmddyyyy)

 

Signature of Taxpayer

               
                   

Official Use Only

                         

I accept the waiver of the statutory period of limitations on assessment for the Internal Revenue Service, as described in Section V(e).

   

Signature of Authorized Internal Revenue Service Official

Title

             

Date (mmddyyyy)

   
   

Section IX

Application Prepared by Someone Other than the Taxpayer

               

If this application was prepared by someone other than the taxpayer, please fill in that person’s name and address below.

       

Name

                         

Address (if known) (Street, City, State, ZIP code)

                       

Section X

Paid Preparer Use Only

                       

Name of Preparer

 

Signature of Preparer

 

Date (mmddyyyy)

 

Check if

   

Preparer’s CAF no. or PTIN

 
   

self-employed

     

Firm’s name (or yours if self-employed), address, and ZIP code

                       

Section XI

Third Party Designee

                       

Do you want to allow another person to discuss this offer with the IRS?

 

Yes. Complete the information below.

No

   

Designee’s Name

           

Telephone Number

     

(

)

 

Privacy Act Statement

We ask for the information on this form to carry out the internal revenue laws of the United States. Our authority to request this information is Section 7801 of the Internal Revenue Code.

Our purpose for requesting the information is to determine if it is in the best interests of the IRS to accept an Offer in Compromise. You are not required to make an Offer in Compromise; however, if you choose to do so, you must provide all of the taxpayer information requested. Failure to provide all of the information may prevent us from processing your request.

If you are a paid preparer and you prepared the Form 656 for the taxpayer submitting an offer, we request that you complete and sign Section X on Form 656, and provide identifying information. Providing this information is voluntary. This information will be used to administer and enforce the internal revenue laws of the United States and may be used to regulate practice before the Internal Revenue Service for those persons subject to Treasury Department Circular No. 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service. Information on this form may be disclosed to the Department of Justice for civil and criminal litigation.

We may also disclose this information to cities, states and the District of Columbia for use in administering their tax laws and to combat terrorism. Providing false or fraudulent information on this form may subject you to criminal prosecution and penalties.

Attention:

Instructions and pertaining forms for completing an accurate Offer in Compromise are available in the Form 656-B, Offer in Compromise Booklet. The Form 656-B is available through the IRS website www.irs.gov.

B 3B (Official Form 3B) (12/07)

APPLICATION FOR WAIVER OF THE CHAPTER 7 FILING FEE FOR INDIVIDUALS WHO CANNOT PAY THE FILING FEE IN FULL OR IN INSTALLMENTS

The court fee for filing a case under chapter 7 of the Bankruptcy Code is $299.

If you cannot afford to pay the full fee at the time of filing, you may apply to pay the fee in installments. A form, which is available from the bankruptcy clerk’s office, must be completed to make that application. If your application to pay in installments is approved, you will be permitted to file your petition, generally completing payment of the fee over the course of four to six months.

If you cannot afford to pay the fee either in full at the time of filing or in installments, you may request a waiver of the filing fee by completing this application and filing it with the Clerk of Court. A judge will decide whether you have to pay the fee. By law, the judge may waive the fee only if your income is less than 150 percent of the official poverty line applicable to your family size and you are unable to pay the fee in installments. You may obtain information about the poverty guidelines at www.uscourts.gov or in the bankruptcy clerk’s office.

Required information. Complete all items in the application, and attach requested schedules. Then sign the application on the last page. If you and your spouse are filing a joint bankruptcy petition, you both must provide information as requested and sign the application.

B 3B (Official Form 3B) (12/07) -- Cont.

UNITED STATES BANKRUPTCY COURT

         

District of __________

         
                                 

In re:

___________________

     

Case

 

___________________

     

Debtor(s)

(if known)

APPLICATION FOR WAIVER OF THE CHAPTER 7 FILING FEE FOR INDIVIDUALS WHO CANNOT PAY THE FILING FEE IN FULL OR IN INSTALLMENTS

   

Part A. Family Size and Income

                     

1.

Including yourself, your spouse, and dependents you have listed or will list on Schedule I (Current Income of Individual Debtors(s)), how many people are in your family? (Do not include your spouse if

   

you are separated AND are not filing a joint petition.) __________

   

2.

Restate the following information that you provided, or will provide, on Line 16 of Schedule I. Attach a completed copy of Schedule I, if it is available.

   
 

Total Combined Monthly Income (Line 16 of Schedule I):

     

$____________________

3.

State the monthly net income, if any, of dependents included in Question 1 above. Do not include any income already reported in Item 2. If none, enter $0.

   
                         

$____________________

4.

Add the “Total Combined Monthly Income” reported in Question 2 to your dependents’ monthly net income from Question 3.

   
                         

$____________________

5.

Do you expect the amount in Question 4 to increase or decrease by more than 10% during the next 6

   

months? Yes

No ___

   

If yes, explain.

Part B. Monthly Expenses

 
 

6.

EITHER (a) attach a completed copy of Schedule J (Schedule of Monthly Expenses), and state your total monthly expenses reported on Line 18 of that Schedule, OR (b) if you have not yet completed Schedule J, provide an estimate of your total monthly expenses.

   
                       

$____________________

   

7.

Do you expect the amount in Question 6 to increase or decrease by more than 10% during the next 6

months? Yes

No ___

   
   

Part C. Real and Personal Property

 

EITHER (1) attach completed copies of Schedule A (Real Property) and Schedule B (Personal Property), OR (2) if you have not yet completed those schedules, answer the following questions.

   

8.

State the amount of cash you have on hand.

     

$ ____________________

   

9.

State below any money you have in savings, checking, or other accounts in a bank or other financial institution.

   
 

Bank or Other Financial Institution:

   

Type of Account such as savings,

___________________

 

Amount:

       
 

_________________________

 

checking, CD:

 

$____________________

     
 

_________________________

 

___________________

   

$____________________

     

B 3B (Official Form 3B) (12/07) -- Cont.

  • 10. State below the assets owned by you. Do not list ordinary household furnishings and clothing.

         

Address:

                   
 

Home

     

____________________________

____________________________

 

Value: $ ____________________

     
                         
           

Amount owed on mortgages and liens: $ ____________________

                           
         

Address:

                         
 

Other real estate

 

____________________________

_____________________________

 

Value: $ ____________________

     
                         
           

Amount owed on mortgages and liens: $ ____________________

                           
                                 
 

Motor vehicle

 

Model/Year: ___________________

____________________________

Model/Year: ___________________

____________________________

 

Value: $ ____________________

     
           

Amount owed: $ ____________________

   
             
 

Motor vehicle

   

Value: $ ____________________

Amount owed: $ ____________________

   
 

Other Description___________________

 

Value: $ ____________________

     
         

___________________________

 

Amount owed: $ ____________________

   

11.

State below any person, business, organization, or governmental unit that owes you money and the amount that is owed.

 
   

Name of Person, Business, or Organization that Owes You Money

 

Amount Owed

           
   

__________________________________

   

$ ____________________

       
   

__________________________________

   

$ ____________________

       

Part D. Additional Information.

                       

12.

Have you paid an attorney any money for services in connection with this case, including the

No ___

   
     
 

completion of this form, the bankruptcy petition, or schedules? Yes If yes, how much have you paid? $ ____________________

             

13.

Have you promised to pay or do you anticipate paying an attorney in connection with your

   
     
 

bankruptcy case? Yes

No ___

             
                               

14.

Have you paid anyone other than an attorney (such as a bankruptcy petition preparer, paralegal,

 
 

typing service, or another person) any money for services in connection with this case, including the

No ___

 
   
 

completion of this form, the bankruptcy petition, or schedules? Yes If yes, how much have you paid? $ ____________________

             

15.

Have you promised to pay or do you anticipate paying anyone other than an attorney (such as a bankruptcy petition preparer, paralegal, typing service, or another person) any money for services in connection with this case, including the completion of this form, the bankruptcy petition, or schedules?

 
 

Yes

No ___

                       
 

If yes, how much have you promised to pay or do you anticipate paying? $ ____________________

 

16.

Has anyone paid an attorney or other person or service in connection with this case, on your behalf?

 
 

Yes

No ___

 
 

If yes, explain.

                             
   

B 3B (Official Form 3B) (12/07) -- Cont.

17.

Have you previously filed for bankruptcy relief during the past eight years? Yes

No ___

     
 

Case Number (if

 

Year filed Location of filing

 

Did you obtain a discharge? (if known)

 

known)

   

______________

 

Yes ____

No

Don't know

____

 

___________________

 

_______

 

______________

 

Yes ____

No

Don't know

____

18.

   

19.

Please provide any other information that helps to explain why you are unable to pay the filing fee in installments.

 
 

I (we) declare under penalty of perjury that I (we) cannot currently afford to pay the filing fee in full or in installments and that the foregoing information is true and correct.

 

Executed on:

___________________

       

________________________________

   
   

Date

___________________

       

Signature of Debtor

________________________________

   
   

Date

               

Signature of Codebtor

     

------------------------------------------------------------------------------------------------------------------------------------------------------

 
 

DECLARATION AND SIGNATURE OF BANKRUPTCY PETITION PREPARER (See 11 U.S.C. § 110)

   

I declare under penalty of perjury that: (1) I am a bankruptcy petition preparer as defined in 11 U.S.C. § 110; (2) I prepared this document for compensation and have provided the debtor with a copy of this document and the notices and information required under 11 U.S.C. §§ 110(b), 110(h), and 342(b); and (3) if rules or guidelines have been promulgated pursuant to 11 U.S.C. § 110(h) setting a maximum fee for services chargeable by bankruptcy petition preparers, I have given the debtor notice of the maximum amount before preparing any document for filing for a debtor or accepting any fee from the debtor, as required under that section.

 
 
                   

__________________________ Social-Security No. (Required by 11 U.S.C. §110.)

   

If the bankruptcy petition preparer is not an individual, state the name, title (if any), address, and social-security number of

 

the officer, principal, responsible person, or partner who signs the document.

________________________________

                 
                 

________________________________

Address

                             
                             

__________________________________________________

       

_____________________

   

x Signature of Bankruptcy Petition Preparer

             

Date

           

Names and Social-Security numbers of all other individuals who prepared or assisted in preparing this document, unless the bankruptcy petition preparer is not an individual:

If more than one person prepared this document, attach additional signed sheets conforming to the appropriate Official Form for each person. A bankruptcy petition preparer’s failure to comply with the provisions of title 11 and the Federal Rules of Bankruptcy Procedure may result in fines or imprisonment or both. 11 U.S.C. § 110; 18 U.S.C. § 156.

B 3B (Official Form 3B) (12/07) -- Cont.

UNITED STATES BANKRUPTCY COURT

     

District of __________

       
                     
 

Case

 

___________________

 
 

In re: ___________________ Debtor(s)

ORDER ON DEBTOR’S APPLICATION FOR WAIVER OF THE CHAPTER 7 FILING FEE

Upon consideration of the debtor’s “Application for Waiver of the Chapter 7 Filing Fee,” the court orders that the application be:

 

[ ] GRANTED.

               
 

This order is subject to being vacated at a later time if developments in the administration of the bankruptcy case demonstrate that the waiver was unwarranted.

 

[

] DENIED.

                 
 

The debtor shall pay the chapter 7 filing fee according to the following terms:

       
 

$

on or before __________

           
 

$

on or before __________

           
 

$

on or before __________

           
 

$

on or before __________

           
 

Until the filing fee is paid in full, the debtor shall not make any additional payment or transfer any additional property to an attorney or any other person for services in connection with this case.

 

IF THE DEBTOR FAILS TO TIMELY PAY THE FILING FEE IN FULL OR TO TIMELY MAKE INSTALLMENT PAYMENTS, THE COURT MAY DISMISS THE DEBTOR’S CASE.

[

] SCHEDULED FOR HEARING.

             
 

A hearing to consider the debtor’s “Application for Waiver of the Chapter 7 Filing Fee” shall be held

 

on

 

at

am/pm at ________________________________________. (address of courthouse)

 

IF THE DEBTOR FAILS TO APPEAR AT THE SCHEDULED HEARING, THE COURT MAY DEEM SUCH FAILURE TO BE THE DEBTOR’S CONSENT TO THE ENTRY OF AN ORDER DENYING THE FEE WAIVER APPLICATION BY DEFAULT.

         

BY THE COURT:

       

DATE: __________

   

__________________________ United States Bankruptcy Judge

   
       

The 2010 Poverty Guidelines for the 48 Contiguous States and the District of Columbia

Persons in family

Poverty guideline

 
  • 1 $10,830

 
  • 2 14,570

 
  • 3 18,310

 
  • 4 22,050

 
  • 5 25,790

 
  • 6 29,530

 
  • 7 33,270

 
  • 8 37,010

For families with more than 8 persons, add $3,740 for each additional person.

  • 2010 Poverty Guidelines for Alaska

Persons in family

Poverty guideline

 
  • 1 $13,530

 
  • 2 18,210

 
  • 3 22,890

 
  • 4 27,570

 
  • 5 32,250

 
  • 6 36,930

 
  • 7 41,610

 
  • 8 46,290

For families with more than 8 persons, add $4,680 for each additional person.

  • 2010 Poverty Guidelines for Hawaii

Persons in family

Poverty guideline

 
  • 1 $12,460

 
  • 2 16,760

 
  • 3 21,060

 
  • 4 25,360

 
  • 5 29,660

 
  • 6 33,960

 
  • 7 38,260

 
  • 8 42,560

For families with more than 8 persons, add $4,300 for each additional person.

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Michael R. Fuller, OSB #09357 Attorney for Debtors

PO Box 12829 Portland, OR 97210

(503) 362-9393

 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF OREGON

IN RE:

)

)

Case No. 10-55555-AER7

John and Jane Doe,

)

 

Debtors.

)

MOTION FOR APPOINTMENT

 

)

OF NEXT FRIEND

Debtors, John and Jane Doe, by and through their attorney, Michael R. Fuller, hereby moves this Court for

the appointment of a next friend pursuant to F.R.Bankr.P. 1016 as follows:

  • 1. This Chapter 7 proceeding was commenced on July 1, 2010.

  • 2. Debtors attended the 341(a) Meeting of Creditors on August 15, 2010.

  • 3. During the Trustee’s questioning of the Debtors it became apparent that debtors lacked knowledge of the details of their financial affairs.

  • 4. Debtors have both been diagnosed with Alzheimer’s disease which has affected their memory.

  • 5. Pursuant to F.R.Bankr.P. 1016, this Court may appoint a next friend for the prosecution of the within petition as the Court “shall make such other order as it deems proper for the protection of the infant or incompetent person.”

    • 6. It is necessary that this Court appoint Johnny Doe as next friend because the Debtors, John and Jane Doe, are incapacitated.

  • 7. Johnny Doe is the Debtors’ grandson has personal knowledge of the details of Debtors’ finances and is able and willing to attend the 341(a) and respond to the trustee’s questions in this matter.

  • 8. This Motion is supported by the attached Declaration of Johnny Doe and incorporated herein by this reference.

WHEREFORE, Debtors prays this Court appoint Johnny Doe as next friend to act on all matters to which the

Debtors can act.

DATED this 5 th day of September , 2010.

1 - MOTION FOR APPOINTMENT OF NEXT FRIEND

/s/ Michael R. Fuller

Michael R. Fuller, OSB#09357 Attorney for Debtors

Olsen, Olsen & Daines, LLC

PO Box 12829 Salem, OR 97309-0829 Telephone (503) 362-9393 Facsimile (503) 362-1375

1

 

Michael R. Fuller, OSB #09357 Attorney for Debtors

 

2

PO Box 12829 Portland, OR 97210

3

(503) 362-9393

4

 

5

 

IN THE UNITED STATES BANKRUPTCY COURT

 

6

 
 

FOR THE DISTRICT OF OREGON

 

7

 
 

IN RE:

)

8

 

)

Case No. 10-55555-AER7

 

John and Jane Doe,

)

9

 

)

DECLARATION OF JOHNNY DOE

 

Debtors.

)

IN SUPPORT OF MOTION FOR

10

 

)

APPOINTMENT OF NEXT FRIEND

11

 

I, Johnny Doe, do state under penalty of perjury:

12

  • 1. I am the grandson of the Does, the debtors in the above-entitled case.

13

  • 2. I am aware of my grandparents’ finances including the details regarding who they

14

owe, what they own, what their monthly expenses are and the source and amounts

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of their income.

 

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  • 3. I assist them in making sure their monthly bills get paid and help them track their

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bank accounts.

 

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  • 4. I believe I can testify on behalf of my grandparents regarding their finances and

19

otherwise assist them in this matter.

 

20

I make this declaration in support of the Motion for Appointment of Next Friend.

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Dated this

1st day of September, 2010.

 

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/s/ Johnny Doe Johnny Doe

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Olsen, Olsen & Daines, LLC

1 - DECLARATION OF JOHNNY DOE

 

PO Box 12829 Salem, OR 97309-0829 Telephone (503) 362-9393 Facsimile (503) 362-1375

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Michael R. Fuller, OSB #09357 OlsenDaines

P.O. Box 12829 Portland, OR 97210

(503)362-9393

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF OREGON

 

)

IN RE:

)

John and Jane Doe,

Debtors,

)

)

)

)

)

Case No. 10-55555-AER7

CERTIFICATE OF SERVICE

CERTIFICATE OF SERVICE

I, Michael R. Fuller, certify that I have served the foregoing MOTION FOR APPOINTMENT OF

NEXT FRIEND by mailing a copy through first class mail, return receipt requested, to the following

on 10/1/2010.

Michael A. Grassmueck, Inc., Trustee c/o Michael A. Grassmueck

POB 5248 Portland, OR 97208-5248

Office of the US Trustee

Wayne L. Morse Courthouse

405 East 8

th

Avenue, Suite 1100

Eugene, OR 97401

And all creditors on the Court’s Mailing Matrix in this matter.

DATED:

October 1, 2010

/s/ Michael R. Fuller

Michael R. Fuller, OSB #09357 Attorney for Debtors.

1 - Certificate of Service

Olsen, Olsen & Daines, LLC

PO Box 12829 Salem, OR 97309-0829 Telephone (503) 362-9393 Facsimile (503) 362-1375