Allowance of bad debt

On July 11, 2012, the U.S. Department of Health and Human Services (HHS) published a proposed rule codifying the Medicare bad debt provisions in Section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012, which became effective earlier this year.Under the rule, by fiscal year 2015, allowable bad debt amounts will decrease to 65 percent for many providers, including hospitals, skilled nursing facilities, critical access hospitals, federally qualified health centers, and rural health clinics.  HHS notes that the new bad debt provisions will save the Medicare program $10.9 billion over the next ten years. … [Read more...] about New Medicare Bad Debt Proposed Rule

Note: Register for this month’s CLE, “Current Developments in Tax Law,” from 1-2 p.m. ET on Wednesday, Nov. 18.Despite recent murmurs that the recession may be easing its grip on the United States, debt continues to sap the financial strength of millions of families and businesses around the country.Home foreclosure is one of debt’s most wrenching symptoms. In August, according to RealtyTrac, foreclosure filings were reported on 358,471 properties. That number amounts to one of every 357 housing units in the country.There was a smidge of good news. Filings were down 1 percent from July. Still, there were 18 percent more than in August 2008.Meanwhile, August consumer bankruptcy filings totaled 119,874, an increase of 24 percent over the number of filings in August 2008,according to the American Bankruptcy Institute, a nonpartisan organization that analyzes issues relating to insolvency. Here, too, there was a little bit of good news: The number of bankruptcy … [Read more...] about The Bad-Debt Blues

Introdution The Debts Recovery Tribunal has been constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. To aid the procedure thereof, the Debts Recovery Tribunal (Procedure) Rules 1993 were also drafted.While initially the Debts Recovery Tribunals did perform well and helped the Banks and Financial Institutions recover substantially large parts of their non performing assets, or their bad debts as they are commonly known, but their progress was stunted when it came to large and powerful borrowers. These borrowers were able to stall the progress in the Debts Recovery Tribunals on various grounds, primarily on the ground that their claims against the lenders were pending in the civil courts, and if the Debts Recovery Tribunal were adjudicate the matter and auction off their … [Read more...] about Debt Recovery Tribunal: A Non-Performing Asset

The U.S. Department of the Treasury recently issued final regulations providing helpful clarifications on the partnership and partner level tax consequences of debt-for-equity exchanges.On November 15, 2011, the U.S. Department of the Treasury (DOT) issued final regulations governing the federal income tax treatment of a transaction in which a partnership issues a partnership interest to a creditor in satisfaction of the partnership’s indebtedness.  These regulations largely follow the approach taken in the proposed regulations issued in 2008, but with some helpful clarifications added.BackgroundIn 2004, Congress amended Section 108(e)(8) of the Code to provide that, when a debtor partnership issues a capital or profits interest to a creditor in satisfaction of a recourse or nonrecourse debt of the partnership, the partnership is treated as having satisfied the debt for an amount of money equal to the fair market value of the partnership interest being issued to the … [Read more...] about Final Regulations on Partnership Debt-for-Equity Exchanges

The European Union has introduced a new procedure to facilitate cross-border debt recovery, which aims to preserve funds and recover bad debt.BackgroundRegulation No. 655/2014 (the Regulation) was introduced to preserve funds and allow recovery of bad debt across EU borders. The European Commission estimated that the Regulation will lead to the recovery of €373 million–€600 million per year. However, this is not the only impact of the Regulation—it also provides shared rules regarding the procedure for issuing an order, a disclosure order relating to banking information, enforcement standards, and available remedies.To achieve its aims, the Regulation has created European Account Preservation Orders (EAPOs) (commonly referred to as “Preservation Orders” in the Regulation text), which are available as an alternative to any instrument available under the relevant national law. EAPOs are separate and standalone Europe-wide orders, which enable creditors … [Read more...] about European Account Preservation Orders: A New Method for Debt Recovery