Mark Atchley – Bankruptcy Attorney Mesa AZ Bankruptcy Attorney Thu, 18 Jul 2019 14:48:08 +0000 en-US hourly 1 Are Late-filed Tax Returns Dischargeable in Bankruptcy Wed, 14 Dec 2016 19:36:28 +0000 Some not-so-clear amendments to the bankruptcy code in 2005 have opened the door to widely varying interpretations, resulting in different courts around the country issuing different opinions about whether income tax debt on a late-filed tax return can ever be discharged in a Chapter 7 bankruptcy.  The IRS says that in order for a tax return to be considered a “tax return” for legal purposes, it must satisfy all the requirements of non-bankruptcy law, including the “timely filing requirement”.  Therefore, a late-filed return may not satisfy all filing requirements, and therefore may not be considered to be a legal return that would start the 2-year clock running.  Ultimately, this would have the result of a tax year with a late-filed return would never be dischargeable in bankruptcy.

This interpretation is a somewhat counter-intuitive—if courts don’t consider a late-filed tax return to be a “return” under the law, the result is that the Two-year rule would never be applied.  Why even have a Two-year rule?  It is clear (to me, anyway) that the drafters of the 2005 amendment to the bankruptcy code did not intend to disqualify all late-filed returns from discharge under the Two-year rule, and recent court decisions around the country which ruled to the contrary were strained and twisted in order to obtain the desired result.  Until lately, even the IRS agreed that it set a bad precedent.  However, I have seen a few indicators that the IRS, even here in the 9th Circuit, may be following that path and objecting to discharge of late-filed returns.



What taxes can I discharge in bankruptcy? Fri, 19 Aug 2016 20:07:02 +0000 It is true—certain taxes can be discharged in chapter 7 bankruptcy.  The bankruptcy code allows some individual income tax debt to be wiped out forever if a few requirements are met.

I talk about this on this YouTube video.

3 Year Rule

First, the tax return must have last come due at least 3 years before the bankruptcy is filed. Let’s say that you applied for an extension on your 2012 tax returns, which means that the return came due on Oct 15, 2013. Three years from that date is October 15, 2016—that is the earliest date that those taxes would be dischargeable.

2 Year Rule

Second, the return must have been filed, by you, at least two years before the filing of the bankruptcy. This means that if the IRS or state prepared and filed your return for you (“Substitute For Return”), this tax is not dischargeable. If you filed your tax return on time this rule is really irrelevant. It used to be true that if you had unfiled returns, you could prepare and file them, wait two years and file a bankruptcy. It’s not that simple nowadays—we’ll discuss that more here.

240 Day Rule

Third, the tax must have been assessed by the IRS more than 240 days (8 months) before the bankruptcy. Taxes are assessed when the IRS makes a notation on their official record regarding the exact amount of taxes due. The IRS sometimes assesses additional taxes months or years after the original returns was filed, meaning that the new tax assessed would be subject to the 240-day rule.

Tax evasion is a no no

Fourth, if the taxpayer is willfully evading paying taxes, the tax is nondischargeable. This is usually considered to be something more than just not filing the tax returns.

No Fraudulent Returns

And finally, Fifth, fraudulent returns are never dischargeable.


If you have further questions about this or if you need to speak with a bankruptcy attorney in Mesa AZ, please contact my office at:

Mark Atchley – Bankruptcy Attorney
1013 S Stapley Dr
Mesa, AZ 85204
(480) 497-5009

How to Give Great Gifts without Going Broke Sun, 01 May 2016 20:33:18 +0000 Set a Budget

How many times have you gone shopping for a gift not knowing exactly what you wanted to buy? Next thing you know you’re checking out with a $50 something-or-other that you’re not super excited about but purchased because you didn’t want to be too cheap but also because you figured at that price range it could be cool.

Rather than going down the road of spending too much and risking getting something that is mediocre, create a budgetso you’ll know how much you want to spend and can shop for things within that price range.

Plan Ahead

Buying last minute gifts means you are subject to whatever is at the store you choose to shop at. If you can decide ahead of time that you will be buying your friend a gift, look for sales or do some comparison shopping so you can save some money. When you plan ahead you’ll be able to do research on products, ensure that you are choosing the right one and will feel better about the deals you find.

Pictures are Always Memorable (and cheap!)

One of the cheapest ways to give someone a gift is to make them something. However, not all of us are creative and the mere thought of creating anything would make us go to the store, hand over our credit cards and put that artsy idea to bed.

If you have any pictures of your friend or loved one, and especially one of the two of you together, you have already made something – memories! Get a few pictures of the two of you together printed out at the local drugstore (they almost all have photo kiosks that can pull pictures from your cell phone) and buy a nice 4” x 6” frame. If you buy a few pictures and a frame you’ll probably be able to walk out of there for under $10 bucks and you’ll have a gift that is more memorable than any toy, t-shirt or kitchen accessory you’ll ever find.

The Ol’ 2-for-1 Trick

If you are buying a gift for a holiday, an anniversary or around a time where two partners/siblings/roommates have a close birthday, buy something that will satisfy both people.

Know mom loves to cook and dad loves to eat? How about a crock pot? Know roommates Billy and Louie love to play X-Box? How about a new game?

You’ll end up spending a little more this way than you would on a single gift but less than you would on two separate gifts.

Find Coupon Sites

Before shelling out money on the wedding registry or cutting a check, use coupon websites like Retail Me Not or Coupon Sherpa to find sweet deals at your favorite stores. Also, if it’s a wedding gift you’re after consider looking it up on the registry and then buying it at another store for cheaper. Just remember to take it off the registry and keep the receipt.

Group Gift It!

Last but not least is the art of finding other thrifty friends or relatives who want to pitch in. If you want to get a bigger-ticket item but don’t want to tackle the expense all by yourself, this is definitely the way to go. You’ll also look like rock stars because no single person will want to buy the high-end gifts and if a few people pool together and get it the recipient will be surprised and everyone will feel good about the purchase and money-savings. is an IRS Approved 501c3 Non-Profit Florida Corporation dedicated to our mission to educate, advise and empower youth to seniors to handle debt, credit and housing and to provide affordable housing opportunities through the acquisition and rehabilitation of residential properties.

Debt Collection FAQs Fri, 01 Apr 2016 20:31:47 +0000 If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you. Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.

Here are some questions and answers about your rights under the Act.

What types of debts are covered?

The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.

Can a debt collector contact me any time or any place?

No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.

How can I stop a debt collector from contacting me?

If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:

Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.

Can a debt collector contact anyone else about my debt?

If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

What does the debt collector have to tell me about the debt?

Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.

Can a debt collector keep contacting me if I don’t think I owe any money?

If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.

What practices are off limits for debt collectors?

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

use threats of violence or harm;
publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
use obscene or profane language; or
repeatedly use the phone to annoy someone.
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

falsely claim that they are attorneys or government representatives;
falsely claim that you have committed a crime;
falsely represent that they operate or work for a credit reporting company;
misrepresent the amount you owe;
indicate that papers they send you are legal forms if they aren’t; or
indicate that papers they send to you aren’t legal forms if they are.
Debt collectors also are prohibited from saying that:

you will be arrested if you don’t pay your debt;
they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.
Debt collectors may not:

give false credit information about you to anyone, including a credit reporting company;
send you anything that looks like an official document from a court or government agency if it isn’t; or
use a false company name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
deposit a post-dated check early;
take or threaten to take your property unless it can be done legally; or
contact you by postcard.
Can I control which debts my payments apply to?

Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.

Can a debt collector garnish my bank account or my wages?

If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.

Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.

Can federal benefits be garnished?

Many federal benefits are exempt from garnishment, including:

Social Security Benefits
Supplemental Security Income (SSI) Benefits
Veterans’ Benefits
Civil Service and Federal Retirement and Disability Benefits
Service Members’ Pay
Military Annuities and Survivors’ Benefits
Student Assistance
Railroad Retirement Benefits
Merchant Seamen Wages
Longshoremen’s and Harbor Workers’ Death and Disability Benefits
Foreign Service Retirement and Disability Benefits
Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
Federal Emergency Management Agency Federal Disaster Assistance
But federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.

Do I have any recourse if I think a debt collector has violated the law?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.

What should I do if a debt collector sues me?

If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.

Where do I report a debt collector for an alleged violation?

Report any problems you have with a debt collector to your state Attorney General’s office ( and the Federal Trade Commission ( Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.

For More Information

To learn more about debt collection and other credit-related issues, visit and, the U.S. government’s portal to financial education.

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Source: FTC Consumer Protection

Wall Street Journal: White House Floats Bankruptcy Process for Some Student Loan Debt Sat, 12 Mar 2016 20:30:30 +0000 WASHINGTON—The White House is weighing steps to make it easier for Americans to expunge certain student loans through bankruptcy, opening the door for student debt made by private lenders to be treated on par with credit-card debt and mortgages.

Read the Full Article –>