Bankruptcy Chapter 7 & 13

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Creditor's Claims in Bankruptcy

I am a CPA in CA.  Is an accounting fee for tax preparation an unsecured priority claim under Sec. 507(a)(2)?

Since you have had the wonderful experience of delving into the tax code, you know that nothing drafted in Washington D.C. is as simple as it appears to be. In this case it's even a bit more complicated since the amended code was drafted in large part by the creditors' lobbyists and handed to the congressmen with the sometimes substantial campaign contributions from their clients, the banks and credit unions. So, unless you happen to be one of those entities it is unlikely that you will be receiving favorable treatment by the code.

Although it may appear that your claim should be entitled to priority under Section 507(c)(2), that section requires that the claim also qualify under Section 503(b). That section generally requires that such accounting services be rendered during the administration of the estate, and further that such services be approved by the court.

If you are an eternal optimist, you may review the rest of 507 and 503 to see if there is any other category under which your claim may qualify, but I would not be holding my breath. Better yet (from the bankruptcy lawyer's point of view), you could retain an attorney who would happily review each clause in detail to see if you claim may qualify for some favorable treatment, and, of course, bill you for the time expended.

[10-11-06]


These questions and answers are not intended as legal advice or as a statement of the law.  They are intended to suggest areas which you should discuss with your attorney.

Although Bankruptcy law is Federal code applicable to all states, the way it is applied may depend upon state law and varying practices of the courts, trustees, and even attorneys. As a result, some of these answers are directly applicable only in cases filed by our office in Arizona.

This page was last revised: 10/11/06