Tiffany-Ashley Disney and Prof. Patricia Redmond
Miami Law’s Bankruptcy Assistance Clinic recently helped a client fight a creditor who had improperly filed two 1099s with the IRS after a successful chapter 7 bankruptcy. Recent graduate Tiffany-Ashley Disney argued this case in federal court, under the direction of Professor Patricia Redmond, Director of the Bankruptcy Clinic, and won.
“I was really glad I was able to help out this client,” said Disney, who graduated this past May and is currently studying for the Florida Bar exam. “What the creditors were doing was unfair and I'm glad I had a hand in preventing them from interfering with our client anymore.”
The Bankruptcy Clinic originally helped the client complete a chapter 7 bankruptcy, which enabled the client to start fresh, with all her debts discharged. Since it was a permanent discharge injunction, it was entered by the court in order to prevent any interference by the creditor.
A couple of years later, one of the creditors filed two 1099 forms. Essentially, based on this filing, the IRS could conclude that the client received additional income, when in fact that was not true, bringing with it unforeseen tax consequences. The client then reached out to the Clinic for help.
While this was not technically an attempt to collect a debt, it did interfere with the client’s fresh start, which is a guarantee under the bankruptcy code. The Clinic moved the court to re-open the case in order to enforce the discharge injunction against the creditor, and to clarify and enforce the discharge order, so the IRS would know what and happened and not view those 1099s as additional income.
Finding that the creditors violated the debtor’s fresh start, the court granted the motion clarifying the discharge injunction. It also imposed sanctions against the creditor for $1,500, with a direction to make the payment to the Bankruptcy Bar Foundation, as the court found the creditor rose to the level of violating the discharge injunction.
“I'm extremely honored and privileged that I had this opportunity as a law student to argue in federal court, it's not something students get to do every day,” said Disney. “The fact that I won and that the creditors were sanctioned was just icing on the cake. It's such a good feeling when you get to successfully help out clients.”