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Questions for HHM Please. I'm so scared! Any other esponses would also be greatly app

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  • Questions for HHM Please. I'm so scared! Any other esponses would also be greatly app

    Hi HHM,

    I greatly appreciate you even taking the time to view my questions at the very least. There are many thing I don't think my attorney understands that have to do with my chapter 7 bankruptcy and you seem extremely knowledgeable so I thought I would give it a shot and ask you a few questions.

    I'm trying to discharge my personal taxes in my chapter 7 bankruptcy. I do meet all of the rules to do so. My attorney put these federal and state taxes on a schedule E. Is that all he needs to do? Also, how can I get the liens off my credit report for the taxes (there is also a lien for a credit card)? I no longer own a home so they can't get any of my home equity but I would like to buy a home in the future. Can the tax liens attach to that home even if my taxes were discharged in bk? I also read that you wrote "if tax liens were filed the tax debt becomes "secured" debt for purposes of bk. Does this mean these taxes should go elsewhere on the bk? Due to an illness and paying out thousands upon thousands to doctors to try and find a cure I owe at least $100K to the IRS and State. The IRS first assessed me at $155K+ and that was one of the liens filed on my report however they later allowed me to file the returns but did not take off that lien.

    Also, under the category personal property my attorney has put down $2480 for a 529 college plan and he also put that down on property claimed as exempt. The 529 plan actually has $15K+ in it. He put down only the last 12 months that it was funded. I know by research that the last 12 months are not exempt. Shouldn't the entire amount of the 529 be put down? Everything is pretty much in my husband's name so I don't know if he would have enough exemptions to cover this. He currently has $9,956 worth of automobiles and we live in Maryland so I'm not sure how this works. I'm not sure what other assets are taken in to account. I'm happy to provide you with any that may need to be added to the exemptions. I'm actually worried about the automobiles because they said one of the cars was joint and it is not. Any information you could give would be helpful. They have also put this down as a joint asset because it is for my son. We can't lose a car and I don't want to lose my son's college money. I'm hoping that there is such a thing as what I hear being referred to as a wildcard exemption. Furthermore, my attorney told us to stop funding the 529 plan and then ended it up putting it on the expense sheet because he needed more expenses.

    I filled out a booklet and put down expenses and they didn't use some of them and my attorney was asking for more but because I didn't have that booklet I couldn't think of any. He added a great deal of expenses that I'm afraid I'm going to be questioned on ( for example $160 a month for water a month or $145 a month in charitable contributions!). He added these after we signed the paperwork so I'm concerned.

    Last both my husband and I have an account for Banfield. Mine is past due and hasn't been paid on for years. My husband's is current and under a contract. Mine is listed under the debts section. My husband's is listed under contracts and leases but it does not list an account number and will say both of our names on it. Won't Banfield get confused and think it is for my past due account? I'm afraid to have my husband call Banfield and tell them to stop billing him because I'm afraid that are going to put it on his credit. I would rather pay them than put it on his credit.

    I know that is a lot of questions and I am more than grateful for any help you can give me what so ever. I'm currently on social security disability due to my illness and it really has made a mess out of things. I would like to own a home again and rebuild my credit if possible.

    Thank you so very much!
    Hope

  • #2
    This is post contains some elements, related to the taxes, that I already posted about. I do see "new" and relevant information in the post so I am going to respond to the entire post.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      Originally posted by hopeandme View Post
      I'm trying to discharge my personal taxes in my chapter 7 bankruptcy. I do meet all of the rules to do so. My attorney put these federal and state taxes on a schedule E. Is that all he needs to do? Also, how can I get the liens off my credit report for the taxes (there is also a lien for a credit card)? I no longer own a home so they can't get any of my home equity but I would like to buy a home in the future. Can the tax liens attach to that home even if my taxes were discharged in bk? I also read that you wrote "if tax liens were filed the tax debt becomes "secured" debt for purposes of bk. Does this mean these taxes should go elsewhere on the bk? Due to an illness and paying out thousands upon thousands to doctors to try and find a cure I owe at least $100K to the IRS and State. The IRS first assessed me at $155K+ and that was one of the liens filed on my report however they later allowed me to file the returns but did not take off that lien.
      This is somewhat more detailed than what you explained in the post here. Remember, in my other post, that I talked about whether the taxes were dischargeable and that they had to fit the criteria. It is the 3YR/2YR/240DAYS criteria. The tax must have been;
      • due more than 3 years before filing (so that would be taxes before 2009).
      • for which you filed a tax return at least 2 years before filing (that would be 2011).
      • , and for which there was nothing assessed within the last 240 days before filing.


      I believe that you have a problem with the "filing" of the tax. You talk only about it being assessed some amounts. Was this because you did not file a tax return and the IRS and State filed one for you? If that is the case, that is problematic and the IRS position in many of those cases -- where the individual didn't file a tax return "on time" -- as having "not" filed a tax return for the purposes of dischargeability. This makes it an area, if you didn't file on time and were later assessed, that you would need to fight.

      As for liens, I explained that in the other post as well. The liens attach to your property as of the day of the assessment. It's ALL property, not just your home. If the IRS debt is discharged, then the liens should systematically be removed or you may need to call the IRS to have them removed.

      That is quite chilling information, but you do have an illness and may be able to work with the IRS, if the taxes are "not" discharged, to place you into non-collectible status. They do that when the person has no assets and no real income

      Originally posted by hopeandme View Post
      Also, under the category personal property my attorney has put down $2480 for a 529 college plan and he also put that down on property claimed as exempt. The 529 plan actually has $15K+ in it. He put down only the last 12 months that it was funded. I know by research that the last 12 months are not exempt. Shouldn't the entire amount of the 529 be put down? Everything is pretty much in my husband's name so I don't know if he would have enough exemptions to cover this. He currently has $9,956 worth of automobiles and we live in Maryland so I'm not sure how this works. I'm not sure what other assets are taken in to account. I'm happy to provide you with any that may need to be added to the exemptions. I'm actually worried about the automobiles because they said one of the cars was joint and it is not. Any information you could give would be helpful. They have also put this down as a joint asset because it is for my son. We can't lose a car and I don't want to lose my son's college money. I'm hoping that there is such a thing as what I hear being referred to as a wildcard exemption. Furthermore, my attorney told us to stop funding the 529 plan and then ended it up putting it on the expense sheet because he needed more expenses.
      As for your 529 Plan, there is not enough information to say anything. I'm sure your attorney asked you the right questions, which include at what time you contributed to the plan. It's a little complex, but amounts put in more than 2 years ago are exempt. The amounts put in between 1-2 years are exempt to $5,000. The amounts in the last 1 year are non-exempt and part of the Estate... so if you put $2,480 in the last year, that's what you put as your interest in the plan. (I'm not an attorney but I might have listed the entire amount on Schedule B and exempted the approx $13K on Schedule C using the appropriate exemption to exempt contributions made more than 1 year ago. But that's minor technicality.)

      As for the automobiles, It sounds like you have 3 of them? I do not know what you exactly have but it reads as though you own them outright (no loans/liens). If so, then you would use your vehicle exemptions and then any wildcard. The Trustee could complain about a third vehicle, but if you have an exemption to cover it, then you exempt it with a wildcard. (The reason to use a wildcard is because the "language" used in the law for the motor vehicle exemption, usually reads the "debtor's interest" in "one" vehicle.

      Originally posted by hopeandme View Post
      I filled out a booklet and put down expenses and they didn't use some of them and my attorney was asking for more but because I didn't have that booklet I couldn't think of any. He added a great deal of expenses that I'm afraid I'm going to be questioned on ( for example $160 a month for water a month or $145 a month in charitable contributions!). He added these after we signed the paperwork so I'm concerned.
      It is beginning to sound to me as though you may be over-the-median income and/or your have expense issues (your cars are entirely paid for). The attorney is looking at all your expenses and trying to categories them. If you feel the expenses in the FILED petition are wrong, set up a meeting and have the attorney explain those expenses to you. Do you even give to charity? Do you donate clothng, food, or pay tithes at churches? Those are all charitable contributions. I can't speak for your water bill... but you would usualy take your annual spending amount and divide by 12 to reach the monthly expense.

      Originally posted by hopeandme View Post
      Last both my husband and I have an account for Banfield. Mine is past due and hasn't been paid on for years. My husband's is current and under a contract. Mine is listed under the debts section. My husband's is listed under contracts and leases but it does not list an account number and will say both of our names on it. Won't Banfield get confused and think it is for my past due account? I'm afraid to have my husband call Banfield and tell them to stop billing him because I'm afraid that are going to put it on his credit. I would rather pay them than put it on his credit.
      If you are both filing and owe any creditor, then that debt MUST be included on your Chapter 7 petition. You do not get to pick and choose which creditors go on the petition and which debts are discharged (well, at least for unsecured debts you have no choice). If you are filing together, then your Husband must list Banfield and Banfield will bedischarged. There is nothing stopping you from paying Banfield after the discharge and close of the bankruptcy, but you will not be legally obligated to do so. Both accounts would be closed if Banfield is smart. (I'm assuming Banfield is the Pet Hospital (system) in Maryland.) If this is an actual executory contract (lease), then that's interesting. Let us know what this Banfield debt (account) is.

      That's a lot to worry about. I wish that you had researched your attorney more and that you had a long talk with the attorney to walk you through everything. It is too much to second-guess your attorney's strategy at this point. Again, it reads as though you may not have qualified for a Chapter 7 due to lack of expenses. I'm guessing that your husband is still working and that income may be what's putting you over the top.
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog


      I am not an attorney. Any advice provided is not legal advice.

      Comment


      • #4
        Hi Justbroke,

        Please know that I am in no way undermining your answers and I really appreciate them! I read a post on chapter 7 federal tax liens from HHM and that is why I am questioning a few things such as what he said such as "You need to file a Motion to Determine Value of Lien with the BK court". This makes me think that the attorney needs to do more than just put the tax liens on the schedule E. I have read on other sites that the liens do not just go away after having the taxes discharged in bankruptcy so I need to make sure. Also, HHM states that federal tax liens are secured debts. This makes me think that the taxes need to go elsewhere. I'm assuming if federal taxes are secured liens than state liens would be too.

        The IRS originally did an assessment but decided to be nice and allowed my tax returns even though they were late. The assessment was before the returns. Once again I do meet all of the rules to have them discharged.

        I do know the rules about the 529 plan (I found out about it after our meeting to sign papers with the attorney). The attorney did not and was trying to make sense of it at the table. I feel like he thinks the last 12 months are exempt. I don't want them to take my son's college plan minus the last 12 months since the total value isn't listed as exempt. I'm so scared! How can the attorney tell us not to fund the 529 plan during the bankruptcy but then to put it down as an expense? Confused.

        We actually have 4 cars. They are all old with high mileage. The three that are in my husband's name equal $9,956 in value. The fourth one is in both of our names and is worth $1996. Our son will be getting his license at the end of December and will be driving that one. If one of the others were to go than we would need another one to drive. They put one of the cars down as joint even though it is not. That car is worth $3771. I'm not sure with the $9,956 in autos if my husband has enough to make the 529k plan part of his exemptions.

        We are not over the median income and we live paycheck to paycheck. They averaged my husband's income and I'm not sure if they put down net or gross on the expense page but he definitely never nets that much. They have things that are actually accurate such as food at $985 and recreations, clubs, entertainment, etc.. at $688 but I'm afraid they will question that. We eat out all of the time because I do not have the energy due to my illness to cook. We also have a teenager who snow boards, who is in a basketball league, we all have a gym membership, and we go to the movies frequently (I like to go to the movies because I get tired of staying in the house all of the time and not being able to work). There is also $800 down for transportation. Did I say I was scared!!!! Last year I made 3 charitable donations of clothing. This year none. I guess I need to clean out my closets fast.

        Yes the attorney has put Banfield down as an Executory Contract but with no account number listed showing it is my husband's plan.

        I have to get this sorted out. With my illness I get so much sicker when I'm stressed and I have to say that I'm extremely stressed!!

        Thank you so much!

        Comment


        • #5
          In your earlier post, you did not write them as liens on Schedule E, but just as taxes. (You only list debt, not liens on Schedule E.) In any event, a Federal Tax Lien is nothing special and is a normal collection tactic for the IRS. When it is filed, it attaches to all property that existed at the time it was filed. It does not attach to new (after-acquired) property.

          There are two ways to remove the liens. Either see if the IRS removes them automatically (systematically) if the debt is discharged, or "fight" the liens which would be the Motion to Determine Secured Value (MDSV). In this instance, you can readily exclude any household items and certain other items under 11 USC 522. Your attorney should and probably would charge you more to file a separate motion to remove any lien. You use the MDSV when the value of the lien exceeds the value of the underlying property (personal/real). Do you have any real property? (I didn't think that you did.) Do you have any personal property (other than household items)? That would be the cars. (You could still file an MDSV to get rid of the lien against the household items, but I don't think the IRS is coming for your forks and knives.) As for whether the IRS would remove the liens on those cars, if the lien attached to them, that's up to the IRS.

          The IRS would always accept a late filed return. That is not the concern I have with your late filed return. What the IRS allowed, was for you to use the tax due based on your "late" filed return, and not the IRS' assessment. That is totally different as to whether the taxes were considered "filed" for purposes of the dischargeability sections of the code.

          Do not worry about the claim of exemptions. Your attorney put down what s/he believes under the law. If the Trustee wants to check the titles on the vehicles and question an exemption, the item may still be actually exempt and the ownership does not matter. (It typically does not matter in a joint filed case.) The Trustee would file an Objection to Claim of Exemption within 30 days of the 341 Meeting.

          Other than the dischargeability of your IRS debt, you should not be worrying about any of the other things. At this point, everything is what it is; so to speak. It would not matter if the car was not joint. It would not matter what exemptions you claimed. What matters now is that your petition will be reviewed, and the Trustee will decide whether they do not like any claims of exemptions. Your discharge is likely to come without question if you are below the median income. (Income is calculated based on your gross income, and not your net income.)

          I think that you are over worried and second guessing your attorney. You really have too many questions for this type of forum. The answers that you are wanting are quite detailed and go specifically to your District, your attorney's strategy, and your specific case. You are second-guessing everything including why the attorney says don't contribute to a 529. A contribution is totally different than an exemption. Your attorney is having you proceed conservatively. (You can continue contributions later.)

          A lot of them are also legal and strategy questions which no one would probably second guess your licensed attorney practicing in your District/State.

          Here are the facts...
          • your estate existed the moment you filed. You can't change the status of anything. This is why we say that it is what it is at this point.
          • you could not have re-titled your cars to "fix" anything since any changes to ownership within a year of filing would be questioned (it's to prevent people "hiding" assets). So the car question can't be answered except by the Trustee. It is up to the Trustee to determine whether they will except your claim of exemptions. If it's owned by either of the filers (husband or wife), it is probably really moot to worry about it if it fits within an exemption anyhow.
          • your taxes are a concern. You wrote "Once again I do meet all of the rules to have them discharged." You technically do not. In order to be eligible for discharge, you must have actually filed your taxes yourself before the IRS assessed taxes. If the IRS assessed taxes or filed a substitute tax return before you did, then you did not file a tax return, for purposes of the dischargeability. Many have been caught up with this, and the IRS has "fought" in some cases. Hopefully, as I wrote before, the IRS just decides that they will just decide that it's dischargeable and you will not need to fight with them (Complaint to Determine Dischargeability).
          • If you needed serious tax consultations, the best would have been to also have a tax attorney as well. Taxes are complex and where there are Federal Tax Liens and $100K+ in arrears, this requires a "real" strategy other than just filing bankruptcy. (As you now know, bankruptcy does not automatically remove liens. A tax strategy is important BEFORE filing.)
          • your 529 Plan's contributions over the last year are not "automatically" exempt by law. The last year of contributions must fall into some exemption. Your attorney only listed the amount that is subject to the bankruptcy estate (the last year). Your attorney exempted that amount on Schedule C using some exemption scheme. As for the amount that you are worried about, it is exempt. The fact that it is not listed does not change the exemption status. If the Trustee questions the item, then your attorney should amend the schedules to include the entire amount and list everything older than one year as exempt based on one exemption law, and the last year using your Wildcard (which is probably what they used.)
          • Transportation is a regional thing and includes your Operating allowance for your vehicles. Did you know that the Allowance from the United State Trustee is $558 for (operating) two cars? Did you know that if the car is over 6 years or over 75,000 miles you get $200 for the car per month? (These are for unencumbered vehicles.) Having four cars can be problematic if your household size is 3. That's just something that can be questioned. If you have the exemption to cover the value, then that's fine so long as you don't claim the operating expense for the vehicle. (Again, these are strategic things that your attorney decides based on your specific District and allowances.) I think your attorney took $200 and multiplied by 4 to get $800 for the "old car" allowance.
          • the Trustee does not (really) care about you going to the Movies or having a gym membership or anything else? As one Judge put it, why should creditors not be paid because you want to go out to eat and have fun? (Harsh, but that's how the Trustee and bankruptcy judge think). Typically your attorney will stuff some "extra" money in other "reasonable" expenses so that you can actually go to the movies "some times" and maybe go to see a movie once in a while. Now, before you get upset with what I wrote, this is what is typical behavior. If you have a medical reason to necessitate things, then it can be an "allowed" and reasonable expense. Yes, you may need to tell the Trustee that you do it for medical reasons. In the end, reasonable entertainment allowances are allowed as expenses.


          That's my view of what you have. Much of it is just that you are concerned and maybe confused and unsure about what your attorney has done. The only thing that would worry me is the treatment of the taxes. There, you may want to see just how the IRS treats your taxes first, and then decide whether you want to file a Complaint to Determine Dischargeability to force the issue. (You can file a dischargeability complaint at any time, including after the case closes. Please understand that such a complaint (AP) can cost a lot of money. That's why I say wait to see what the IRS does first.)
          Last edited by justbroke; 11-25-2013, 08:16 PM.
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog


          I am not an attorney. Any advice provided is not legal advice.

          Comment


          • #6
            Hope,

            The information you are getting from HHM’s thread and JB’s responses are both correct. It will depend upon how Special Procedures Function (the bk department within the IRS) in your district handles the tax lien issue and who SPF turns the file over to.

            The tax lien attaches to everything you own, including the clothes you wear. While the underlying tax you owe may meet all of the requirements for discharge, such does not impact the IRS lien. This is no different from someone who owes money on a vehicle. The loan associated with the vehicle is discharged but the lender’s rights to its collateral (if not paid) remains.

            In many instances the IRS (after the entry of the discharge) will review the file and determine that the taxpayer simply has no personal property of any value and will abate the tax and release the lien. However, technically the IRS does not have to release the lien until the taxpayer pays an amount sufficient to cover the value of the property that secures the lien.

            By way of example. . . Taxpayer owes $100,000.00 in dischargeable tax. IRS has filed a lien for the years involved. Taxpayer files bk. Schedule B shows that the taxpayer has $3,000.00 in personal property (clothing, household furniture, jewelry etc.) Taxpayer also has a vehicle worth $5,000.00 but owes Ford Motor Credit $8,000.00 for the vehicle. The IRS’s claim is secured up to $3,000.00. The IRS is not secured by the vehicle because FMC has a superior interest in the vehicle and there is no equity. In this situation the IRS could demand payment of $3,000.00 plus applicable interest before it will agree to release its lien. Now, since $3,000.00 is not a lot of $$ in the grand scheme of things, it is also possible that the IRS will just walk from its lien rights because, collecting $3,000.00 from a bankrupt person makes no sense.

            As to filing an adversary proceeding, JB is correct. It does not need to be done unless there is a question as to whether or not the taxes meet the test for discharge. The reality is that the IRS tends to know what it is doing as it relates to bankruptcy and it will abate all of the dischargeable tax but for the amount of its lien and, even may walk from that amount as well.

            In situations like this, once the case is filed, I send a “45 day letter” to the IRS outlining which tax I believe is dischargeable. I include in the letter a copy of the recorded lien and a copy of Schedule A, B and D. I then “suggest” that they either walk from the lien or agree to a payment for the “secured” value of the claim. I ask that I get a response within 45 days. I have used such letters for years and, only recently, have been told that a decision regarding my letter will be made once the discharge is entered. I can tell you that this procedure has worked very smoothly and, if a particular tax is not discharged, the IRS explains in detail why.

            As to where the tax is listed. . . My preference is Schedule D due to the tax lien. I then list the value of the “collateral” based upon the value of all property that is not otherwise encumbered. So, in my example above, the amount owed on D would be $100,000.00. The description would be “income tax for tax year ____ secured up to the value of debtor’s personal property with balance dischargeable”. The value of the property would be $3,000.00. If there were no lien to deal with and all of the tax is dischargeable, it would be listed on Schedule F. I only list on Schedule E taxes that are priority (within the 3 years prior to filing if we are dealing with income tax or other non-trust type taxes).

            Des.

            Comment


            • #7
              JB,

              Be careful. Tax liens are not impacted by exemptions. You cannot avoid them under 522(f) as they are statutory in nature.

              The below link will take you to some info on this issue. I have not read the entire Memorandum From Office of Chief Counsel and it is from 2006 but, my guess is that it is a good and correct dissertation of the issues at hand.

              http://www.irs.gov/pub/irs-wd/0634012.pdf

              Des.

              Comment


              • #8
                Originally posted by despritfreya View Post
                Be careful. Tax liens are not impacted by exemptions. You cannot avoid them under 522(f) as they are statutory in nature.
                Yes, I remembered Tax Liens can't be impacted... they are special. I was confusing consensual (non-PMSI) liens. Ugg! I am glad that you popped in. You explained it much better than I did, of course.

                On a side note, I like how you handle the tax issues (tax liens) with the "45 day" letter. That seems like a great strategy. To me, it sounds like this particular attorney may not be well versed in tax issues and just waits to see what he IRS does. (I suggested just waiting to see what the IRS does first, before getting excited.)

                Thank you.

                hopeandme, Des just provided you with the best explanation and personal opinion that you are going to get on any bankruptcy-related site on the Internet.
                Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                Status: (Auto) Discharged and Closed! 5/10
                Visit My BKForum Blog: justbroke's Blog


                I am not an attorney. Any advice provided is not legal advice.

                Comment


                • #9
                  Hi guys!

                  JB, I am not at all upset with you. I'm so grateful for your help! I'm not getting it from my attorney and feel blessed to have this forum with kind people helping me!

                  Des or JB, should I tell the attorney that he needs to put the taxes on the schedule D instead of the schedule E? I'm happy to bring your explanation to him. If not should I send the letter with schedule A, B and E? Is there a certain address I should send the letter to and would you send a letter to the state (I also owe the state of Maryland) as well? My concern is that my attorney has some of my husband and my personal property down as J (for joint) when it is not. By the way, the tax debt is in my name only. For example a car that they state is worth $3771 is down as joint. The only car that is really joint is worth $1996 (although it seems high). Should I have him change that as well? I'm wondering if the attorney did that so we would have enough exemptions. He also has a 529 plan down as joint showing $2480 (I was told they are saying joint because it is with my son and not me), they also have bank accounts down that way (my husband is the representative payee for my son's social security and they put that down as joint as well as a bank account that is for my son's part time job but is under my husband). Isn't the IRS going to think I have all of these assets? What should I do here?

                  Do I call this letter a 45 day letter? I guess the secured value of is truly $1996 if I'm understanding you correctly. I can't afford to pay them that at this time but I sure would be willing to sell that car if I must and give them whatever I can get for it (I believe I would be lucky to get $500/it is a 1999 with 270,000 miles on it) even though it was a car that my son was going to start driving because he is getting his license shortly. It makes it easier on me not to have to drive him to school and work.

                  Depending on your response regarding the joint property I do have one follow up question about the letter if you don't mind.

                  For years I have been excited for the day that I got to file bankruptcy and discharge my tax debt. Now I'm just not sure. I so wanted to own a car or home again and didn't want to wait 10 years.

                  Once again, I can't express how incredibly thankful and grateful I am for you guys and this forum!! Thank you from the bottom of my heart!!!
                  Originally posted by justbroke View Post
                  Yes, I remembered Tax Liens can't be impacted... they are special. I was confusing consensual (non-PMSI) liens. Ugg! I am glad that you popped in. You explained it much better than I did, of course.

                  On a side note, I like how you handle the tax issues (tax liens) with the "45 day" letter. That seems like a great strategy. To me, it sounds like this particular attorney may not be well versed in tax issues and just waits to see what he IRS does. (I suggested just waiting to see what the IRS does first, before getting excited.)

                  Thank you.

                  hopeandme, Des just provided you with the best explanation and personal opinion that you are going to get on any bankruptcy-related site on the Internet.

                  Comment


                  • #10
                    Hope,

                    I cannot answer your questions regarding the joint property. I am in a community property state. All property acquired during marriage is presumed to be owned by both spouses equally with the exception of real estate. Likewise, all debt is community. Now, if I had a married couple to which one spouse had a pre-marital tax debt with a pre-marital lien I would be arguing that only pre-marital assets would be subject to that lien and such would be explained in my letter.

                    As to the letter, the name I gave it "a 45 day letter" is just what I call it. There is no official name to the letter (there isn't even an "official" letter), it is just a letter. Sending this letter is how "I" operate. I am just one attny with an internal procedure that works for me. Your, or some other, attny may handle things differently. This is also true as to which Schedule the taxes are listed. Also, listing the taxes on the wrong Schedule should not impact their dischargeability. Either they are or they are not dischargeable.

                    Do not over think this. Now that you have additional info (print out the info from the link I posted), sit down with your attny and go over everything until you are comfortable that what he is doing is correct. This is your bk and you, as the client, should understand what your attny is doing.

                    Des.

                    Comment


                    • #11
                      If a IRS Federal Tax Lien is filed prior to your filing, and regardless if the underlying income tax is discharged later through BK, the lien remains in tact until it's value is satisfied for the 'value' of the lien. In my case, the underlying tax was discharged and I am no longer responsible for the repayment of the tax, but the lien sticks.

                      I am going to visit local IRS tax advocate center to request to have the Federal tax lien withdrawn as it is serving no purpose as I have no assets for them to offset against, technically making the lien 'worthless' and serves no purpose having it remain post-bankruptcy. Besides, as I understand it, they cannot enforce the lien on any property / assset exempted and / or acquired post bankruptcy?

                      I am just sitting on it for now as my discharge was issued at the end of October and will lett the dust settle for a few months, then visiting my local tax advocacy office to argue my case to have the tax lien withdrawn.

                      On another note, you can sit and let the lien die its natural death as it will in 10 years fall off.... unless the IRS renews for another 10 years, but I have read this does not happen often...
                      Last edited by dischargedbk; 11-26-2013, 01:43 PM.

                      Comment


                      • #12
                        That is my understanding. As Des wrote above, you could see was the IRS Bankruptcy Department (Special Procedure Function) wants to do with the liens. They may just remove them if they will never collect (non-collectable). I don't know when you'd approach the IRS. Maybe Des has an answer based on his experience.
                        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                        Status: (Auto) Discharged and Closed! 5/10
                        Visit My BKForum Blog: justbroke's Blog


                        I am not an attorney. Any advice provided is not legal advice.

                        Comment


                        • #13
                          I was reading on Nolo "In Chapter 7 you cannot discharge priority tax debt nor can you pay it back over time through the bankruptcy". If this is true than doesn't it seem like my attorney has put my tax debt on the wrong schedule?.

                          I was thinking about it and it may be a bad idea to include my schedule A in a letter since it shows so many of my husband's assets including $45K in a 401K that is his (it does have a large loan on it that won't be paid off until 8/16 but it doesn't say that).It says that our personal property equals $68K+. I don't know if the IRS sees this or not but it is not my husband's debt.

                          By the way, I obtained this tax debt after marriage. We just filed married filing separate for the years I owed.

                          I called the IRS to see if they could tell me if whether or not my tax debt meets the rules to be discharged. I was told that years 2005 & 2006 were filed in 2008 (which is definitely incorrect because I filed them in 2010) and that my 2007 taxes were filed in 2010 which is correct. I also was told that the only assessment that they see is for my 2005 taxes and I was told that the assessment was done in 2009. I asked why they would do an assessment in 2009 if my taxes were filed in 2008 but the gentleman could not answer the question and transferred me. I was put on hold for over 40 minutes and my and finally got someone again who transferred me and it said there would be another 30 minute wait and my phone was dying so I had to hang up.

                          I called my legal plan to let them know that I don't think my attorney understands how to discharge my income taxes in a bankruptcy and that I'm really not getting answers from him. They are allowing me to see another attorney tomorrow just to have a consultation. According to her website she is familiar with discharging taxes in a bankruptcy. I'm making a list of what to ask her. I know she will not spend a lot of time with me because the bankruptcy is not with her but if you have any suggestions as to the most important questions I should ask her that would be great. I'm not sure if at this point I could pull the bankruptcy from one attorney and put it with another. I guess it depends on if my legal plan will allow me and if my current attorney will give me my filing fees back minus my one credit counseling course I took.

                          In any case, thanks to the best group of people!!![

                          Comment


                          • #14
                            Originally posted by hopeandme View Post
                            I was reading on Nolo "In Chapter 7 you cannot discharge priority tax debt nor can you pay it back over time through the bankruptcy". If this is true than doesn't it seem like my attorney has put my tax debt on the wrong schedule?.
                            This is true, but you are mixing Priority Tax debt with your situation. If your taxes are over 3 years, filed more than 2 years before filing, and not assessed within 240 days, they are not PRIORITY. Your tax situation is that you have a Federal Tax Lien which is preventing discharge.

                            You should just listen to what Desprifreya wrote and not worry about all this right now.

                            The IRS gets a copy of your Petition. As Des wrote, it goes to the Bankruptcy Department (SPF) and they review the bankruptcy, your assets, your ability to pay.

                            Good luck.
                            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                            Status: (Auto) Discharged and Closed! 5/10
                            Visit My BKForum Blog: justbroke's Blog


                            I am not an attorney. Any advice provided is not legal advice.

                            Comment

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