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In re Robinson (Case No. 07-30085) 03/09/2007

The Court denied the debtor's application to quash non-revocable wage assignment against co-debtor because, as held in In re Stovall, 209 B.R. 849 (E.D. Va. 1997), real estate tax obligations are not consumer debts within the meaning of 11 U.S.C. § 1301(a).  In support of this holding, the Court found that (1) it is highly doubtful that Congress, by enacting the co-debtor stay of 11 U.S.C. § 1301(a), intended to shield non-filing tax debtors from answering their own enforceable tax obligations due to the bankruptcy filing of a party jointly liable for any such obligation and (2) allowing a voluntary agreement put into effect before bankruptcy with a non-filing co-debtor, the effectiveness of which does not involve the commencement or continuation of legal process, to remain in effect post-filing is not an affirmative act by the creditor which infringes the co-debtor stay of 11 U.S.C. § 1301(a), even if the real estate tax debt at issue were determined to be a consumer debt subject to such provision.

Date: 
Friday, March 9, 2007
Category: 
Garnishment
Tax Issues
Chapter: 
13