My recent Chapter 13-Trustee recommends dismissal

[justbroke]

I am definitely not going to allow the IRS ... get the best of me...

In bankruptcy the IRS is one of the nicest creditors to deal with. They are very good at doing the right thing. They may make a mistake, but I haven't seen any (significant) number of them when it comes to tax debt that may be subject to discharge in a bankruptcy.

So long as you filed your returns on time, the bankruptcy code will discharge any tax debt under the 3/2/240 rule (3 years since due, 2 years since you filed the return, and 240 days since an assessment). If you didn't follow the filing rules, then the tax may not be dischargeable. The other nice thing about (priority) IRS tax debt in a Chapter 13 is that the interest stops accruing and any penalties (and the interest on the penalties) are dischargeable. That means if you can' t afford to pay those penalties, then they get discharged. It really is a fair system.

[justbroke]

I just wanted to add that, while a Chapter 7 Trustee has no limits to compensation, a Chapter 13 Standing Trustee cannot make more than a Senior Level V Executive in the Federal government (28 U.S.C. § 586(e)). For 2022, that pay is $165,300 per hear on the SES (select executive service) scale.

Remember, this is the maximum pay, based on earning commission for managing Chapter 13s. But don't think the entire 10% commission goes to them. They have staff attorneys (mine had 3 staff attorneys), an office ($$$ for rent), computers, accountants (mine had 2), other office staff, and equipment. Yes, that comes out of the same money that they collect on the commission. If they earn too much, after expenses, then the commission rate would be reduced.

[chargers777]

Heard from my main man at the office.

He said I am not going to get dismissed, and pretty much to chill out.

Feel better now. Stressful, this chapter 13 stuff. Especially when it came down to my health or money. I choose health. Sad state of affairs in the "free" country we live in (cough, cough, cough). Free my rear end.

[justbroke]

Always choose your health and sanity. I have no problem with that!

[flashoflight]

In bankruptcy the IRS is one of the nicest creditors to deal with. They are very good at doing the right thing. .

Yup. The mortgage lenders are much worse with only HOAs being worse than mortgage lenders. They add junk fees and threaten to add more junk fees if you contest their proof of claim. Lenders have two books, one for if you fail the 13. Another book if you pass the 13. If you compel the lenders to send you an accounting, it will make no sense to you or your attorney in many instances and you may not be able to figure out if it's the pass or fail version. IRS doesn't do any of that although they are nasty as a super-creditor outside of bankruptcy.

I was very glad to get rid of both the 1st and the HELOC during the 13 with a refi and now have a single mortgage in the 2s with no bankruptcy baggage. As a bonus, my HELOC was Prime+1% so my interest only payment would have risen from 4.25% to 6.5% on the rate between mid-March and end of July so it would go up from $573/month to $877/month. Then in late 2023 payment spike goes up even more with a 20yr amortization of principal + interest so it would be $1200/month if rates stay at 6.5%. So all those payment increases are legit according to the note. On top of that are the junk fees.

So for me, the two mortgage lenders were much more of a worry than the IRS.

[justbroke]

Yup. The mortgage lenders are much worse with only HOAs being worse than mortgage lenders. They add junk fees and threaten to add more junk fees if you contest their proof of claim.

This is exactly what happened to me. The HOA really didn't like it when the judge agreed with me that all those fees were dischargeable and subject to a lien strip! They were very mad. And, you're right, everytime I contested something, they tacked on more fees but then they backed off (by no longer even bothering me) after the motion to determine secured status in my favor.

[chargers777]

Its funny and great how they just back off when we decide to file.

And, its a shame that more people don't utilize these legal rights when they need to. I "only" will save about 80k with this move. And that is plenty to justify my decision. That money can be used for investments, in the future, that will be worth 3-5X in the future.

[justbroke]

Its funny and great how they just back off when we decide to file.

The automatic stay (and permanent discharge injunction) are not a joke. To maintain the integrity of the bankruptcy program and the stay... the judges have very little tolerance.

As I told others, I sat in a hearing where Verizon was ordered to pay $80,000 in damages for calling the debtor 79 times and sending 1 letter after filing. The judge stated that they weren't even punitive damages and should Verizon call one more time, the judge would have no problem awarding 4X punitive damages.

So I think they get the point.

[chargers777]

UPDATE:

Made 3 payments so far and 33 more to go.

Things are fine.

I am not happy to save only a little less than 100K, but I will take it. BK is a beautiful thing, and it is sad that more people not as savvy as they need to be in life, because a BK is very necessary in this predatory world we all live in.