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Posts tagged "IRS debt"

Dallas Bankruptcy Attorneys

Finding the right bankruptcy attorney to file your case is an important process.  You have to feel comfortable with your lawyer because it is critical that you make full disclosure of all of your assets, liabilities and financial transactions over the past few years in order for your representative to best assist you. 

Collin County Bankruptcy

Many people in Collin County are having to seek their debt relief options due to the recent recession and awful employment rates.  Often people who previously had a mid to high paying job were forced to take a pay cut or were even laid off.  If they were previously able to service their debt repayment plan, they may no longer have the ability to do so with their reduction in income.

Chapter 13 Bankruptcy

Why would someone file a Chapter 13 Bankruptcy?

There are a number of reasons.  First, if you are behind on your mortgage payment, then a Chapter 13 can help you get current.  A "Chapter 13 Plan" is just like a 5 year note to get you caught up on your notes on the assets that you want to keep.  This "Plan" is just like a 60 month note.

If you have a $2,000 a month house payment and you are 3 months behind on your house, the mortgage company is obviously going to want you to pay them $6,000 to get caught up or they are going to foreclose on the property.  Well, you may not have $6,000 in your pocket since you are going through financial problems.  If you don't want to lose your house, then you need to file a Chapter 13.  That way, you can make your normal monthly payments plus pay back that $6,000 over 60 months (about $100 a month).

Another reason you might file a 13 is because you are facing repossession of a vehicle.  Chapter 13 can prevent that.  

Also, if you have a large IRS obligation then the penalties and interest the IRS is charging you will cease upon the filing of the Chapter 13 Plan and you can pay your taxes back at 0%.

The overwhelming majority of our Chapter 13 clients pay back nothing to the unsecured creditors!

Can I discharge IRS debt?

Sometimes, but generally not. It has been our experience that problems arise unless you deal with the IRS from the outset.  If you file a Chapter 13 bankruptcy, then any non-dischargeable IRS debt can be paid back through the bankruptcy Plan at 0% interest.  That will save you a tremendous amount of money if you owe the IRS more than $10,000.  

If your tax returns have been on file for more than three (3) years and your case happens to fall within the exception to the general rule that taxes are not dischargeable, then it is important to specifically notify the IRS that the taxes have been discharged.  Otherwise, in a Chapter 7 bankruptcy the IRS typically takes the position that they are never discharged.

As such, it is often necessary to file an Adversarial Proceeding in Chapter 7 and obtain a Federal Court Order against the IRS advising them that they have been discharged.  An Adversary Proceeding is like filing a separate lawsuit against the IRS.  When our eligible clients do not obtain such a specific Order from the Federal Bankruptcy Judge, we have found it common for the IRS to continue to try to levy on their accounts and/or to withhold tax refunds to which they would otherwise be entitled.

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