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Chapter 13 Debtors Should Include Proposal to Surrender Tangible Property to Pay Secured Tax Claim According to Latest ABI Poll

Contact: John Hartgen
             703-739-0800
             jhartgen@abiworld.org


CHAPTER 13 DEBTORS SHOULD INCLUDE PROPOSAL TO SURRENDER TANGIBLE PROPERTY TO PAY SECURED TAX CLAIM, ACCORDING TO LATEST ABI POLL

September 26, 2007, Alexandria, Va. —A majority of respondents (62 percent) to ABI’s latest online poll agreed that debtors should include a proposal to surrender tangible property to satisfy a secured tax claim and pay the remaining secured value through their chapter 13 reorganization plan. Fourty-four percent of respondents “strongly agreed” and 18 percent “somewhat agreed” that debtors should surrender tangible property to satisfy a secured tax claim and pay the remaining secured value through their chapter 13 repayment plan.

Twenty-four percent of respondents, however, did not agree that debtors should include a proposal to surrender tangible property to pay a secured tax claim and the remaining secured value through their chapter 13 plan.  Seventeen percent “strongly disagreed” and 7 percent “somewhat disagreed” that debtors should include a proposal to surrender tangible property to pay the remaining value of a secured tax claim and the remaining secured value through their chapter 13 plan. Twelve percent of the respondents did not know or had no opinion on the issue.

The U.S. Court of Appeals for the Fourth Circuit affirmed a district court’s ruling in IRS v. White, (4th Cir. No. 06-1462, 4/23/07), in which the chapter 13 debtors had not properly included a proposal to surrender tangible property and pay the remaining value of a secured tax claim in their reorganization plan. The court found that while the debtors had proposed to “surrender” tangible property, they were not planning to relinquish the property in a timely or proper manner to satisfy the claim. 

ABI members and members of the public were welcome to submit their response to the statement: Debtors properly included in their chapter 13 reorganization a proposal to satisfy a secured tax claim by surrendering tangible property and paying the remaining secured value through the plan. (IRS v. White (In re White)), 4th Cir. No. 06-1462, 4/23/07).

ABI’s weekly Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.