Property taxes/EIC

[freshstarter]

Every year I wait to pay our property taxes with our Earned Income Credit. So as it stands now, we are late with the first property tax payment. Since this is how we do it, I didn't put it in the bk. Will this matter that its not paid up? Also, does every single bill need to be totally current even if they are not listed in the bk?

Also, in another thread, the tax refund was possibly considered an asset. Is this also the case with EIC? I've already listed it as an income.

[freshstarter]

Should I mention that we are not paid up on the taxes at the 341?

[freshstarter]

We are filing chapter 7 for cc debt and that's all we have listed. I've managed to pay all our regular bills, so all that is left (unlisted) is the property taxes. Its the first bill (almost $1000) out of 2 for 2005. We are planning to pay it, but not now, as we are usually too low in money at this time of year. If I have a no asset case, could this still be a problem that its not listed?

[HHM]

Technically, you are supposed to list all you debts in your BK regardless of your intention. You will be asked at the 341 meeting whether you listed all your debts, if you don't have this tax paid in full by then, you will lying under oath.

[freshstarter]

Also, would it help if I got someone else to pay this bill before the 341 so its paid in full? - no way we can pay it ourselves before the 341. And even if we could, wouldn't it be considered preferential since its over $600?

Or would that just create a worse issue? If the bill is paid by someone, then wouldn't that actually lower my expense of those taxes, possible messing up another schedule?

Am I worrying over nothing, or what? Its not even dischargable is it?

[HHM]

The only problem is, you need to exempt your EIC, if not, the trustee is going to grab it and you wont have it to pay your property taxes.

Your best option, since you have to pay it anyway regardless of the BK, get it paid. Its not really a preferential transfer becauese property tax is a higher priority debt so to speak. Preferential transfers only apply to creditors "of the same class", you cannot prefer the one credit card over another (they are both general unsecured debt), but you can prefer your car payment over a credit card, the car payment is a secured debt the credit card is unsecured. Property tax is a quasi secured debt because if you don't pay it the government liens your home.

[freshstarter]

Ok, so its better if I get someone to help me out and pay it now less than 2 weeks before our 341?

I'm still very confused about the EIC - I've added the amount into my income. So if its figured into my expenses, how can it be considered an asset? Its not like extra money. Otherwise I would have just listed it under our wildcard exemptions. Assuming this is the case then, would they just consider it part of the wildcard exemptions? Also, this EIC won't come to us till after we do the taxes. If I do the taxes in April, wouldn't this be safe since its several months away?

[HHM]

First, I am not really a Tax expert and I have never dealt with the EIC in my personal life, but the EIC is basically like a deduction on your Taxes right.

When it comes to taxes and tax refund, the timeline gets a skewed for BK, because you "earn" you tax refund throughout the year (i.e. 2005), you just don't happend to "recieve" the refund until you file you taxes the following year. For BK purposes though, the estate has claim on your refund based on when it was "earned", not when it was recieved. At least in my state, the trustees are having people sign power of attorney's so the trustee can intercept tax refunds when the debtor file their 2005 taxes in Feb, March, April of next year.

I probably would not have listed the EIC as income, and if you have a Wild Card Exemption, you could claim the EIC as an asset on Schedule B, and use a wild card exemption (I assume since you mentioned it, that you have one in your state) to exempt it.

Also, you can amend your petition anytime before discharge.

[freshstarter]

I just got on pacer, and was very disappointed to find a "Yes" next to "asset." I assume this means the trustee expects some non-exempt assets. I believe the exemptions should be available if I adjust the schedules to reflect that.

[freshstarter]

When it comes to taxes and tax refund, the timeline gets a skewed for BK, because you "earn" you tax refund throughout the year (i.e. 2005), you just don't happend to "recieve" the refund until you file you taxes the following year. For BK purposes though, the estate has claim on your refund based on when it was "earned", not when it was recieved. At least in my state, the trustees are having people sign power of attorney's so the trustee can intercept tax refunds when the debtor file their 2005 taxes in Feb, March, April of next year.

I probably would not have listed the EIC as income, and if you have a Wild Card Exemption, you could claim the EIC as an asset on Schedule B, and use a wild card exemption (I assume since you mentioned it, that you have one in your state) to exempt it.

Also, you can amend your petition anytime before discharge.

Thanks for this info. Especially about the tax claims! Gives me an idea of what it is the trustee is looking for and probably why he has us as an asset case. I have amended several schedules. No fee since I'm not changing any creditors! I hope this will change to a no asset case!

[freshstarter]

The amendments worked!! We amended just before the 341.

No assets!