Credit Score Magic

Introduction

On May 23, 2011, Jackson Hewitt Tax Services Inc. (“Jackson Hewitt”) filed a petition for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  This post will look at Jackson Hewitt’s operations, why the company filed for bankruptcy, as well as what Jackson Hewitt hopes to achieve will in bankruptcy.  As is often the case,  much of the information discussed in this post comes from the Debtor’s Declaration in Support of First Day Pleadings (the “Declaration” or “Decl.”).  A copy of the Declaration filed in the Jackson Hewitt bankruptcy is available here for review.

Jackson Hewitt’s Operations

Jackson Hewitt provides tax return preparation services for individual and corporate clients throughout the United States.  The company claims to be the second largest tax return preparer in the United States, having prepared approximately 2.6 million returns in the 2011 tax season.  Decl. at p. 2.  Ja

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Did you know that forgiven debts are considered income by the IRS? Because they are classified as income, they are also taxable. This means that a debt of $10,000 that has been ‘forgiven’ is considered to be unearned income and so subject to taxation. The IRS put it very simply:

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.

As you look around the internet at information related to bankruptcy, you may be confused as to whether or not debt forgiven through bankruptcy is taxable or not. I have read articles that claim that all debt cancelled through bankruptcy is taxable while others claim that no tax is due at  all. Others make various exceptions in a fence-sitting type exercise.

Rather that try and second guess what is fact and what is fiction – let’s put the whole issue to bed. From the IRSs perspective, the situation is very clear and has no exceptions. In respo

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According to the reports of the new study that was released today by the Policy and Economic Research Council (PERC), consumers can now rest easy and they need not be too concerned if there is a possibility of errors occurring in their credit reports, which could be negatively affecting their creditworthiness.

The PERC research is a statistically sound and comprehensive study that is performed under rigorous peer review. The accuracy of the data that has been collected and maintained by the three major credit reporting agencies – Equifax, TransUnion, and Experian, and the impact of the outcome of the credit report disputes, has been studied in great detail. M

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Summary
In an 11 page opinion published May 18, 2011, Judge Shannon ruled that, in the context of a motion to dismiss, the officer of a corporation, which is itself a contractor, is not also a contractor by virtue of her position within the corporation. Judge Shannon’s opinion is available here (the “Opinion”).

Background

Donna K. Brady (the “Debtor”) was the principal officer of DK Brady Excavating, Inc. (“DKBE”). As such, she personally guaranteed a credit agreement on behalf of DKBE with Tri Supply and Equipment, Inc. (the ”Plaintiff”). She eventually defaulted under her obligations to the Plaintiff, had a default judgment entered against her in the Plaintiff’s favor, and filed for bankruptcy under chapter 7. Opinion at *1-2.

The Plaintiff initiated the adversary proceeding in which this opinion arose by filing a complaint seeking for an order denying the discharge sought by the Debtor. The Plaintiff made two allegations, one of which survived the motion for summary judgment. This post will focu

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This post is especially for you shopaholics out there who feel guilty about putting so many unneeded purchases on your credit cards – and I’m not just talking to women. Men, you know you’ve purchased the latest gizmo or the best seats at the game when cash wasn’t necessarily available.

I want to make sure you know about the upcoming shopping season. Memorial Day sales are coming. Those new shoes, that to-die-for bathing suit, the new sofa you need for the living room, and that flat screen TV – they’ll all be on sale. Shortly after that, we’ll have Fourth of July sales, then back to school shopping. Computers will be a good deal then. And what about all the concerts and sporting events that take place during the summer? Shopaholics – the sky is the limit for you in the next few months.

And it’s my job to tell you to go ahead and spend. You may be getting those credit card balances up there, and it may even be a little difficult to make all the payments, but think what you’re doing for the economy and the greater good. Things won’t get be

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Introduction

Earlier this month, George L. Miller, the chapter 7 trustee (the “Trustee”) in the GRA Liquidation bankruptcy proceeding began filing preference complaints against various defendants.  For those not familiar with the GRA Liquidation bankruptcy, Debtor Pecus ARG Holding, Inc. an

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