can old state debts be discharged?

[maineman]

Filed Chapter 7 no asset, pro se, Vermont June 2008, Discharged October 2008

I read on this website that some federal back taxes can be discharged if they meet a certain criteria. Can anyone tell me whether state taxes or levies or fines can be discharged. The situation is this, in 1995 my wife and her first husband were accused of a lapse in insurance coverage which wasn't the case according to my wife. She went down to the DMV and at the time she thought she had cleared it up. Then in 2003 she gets a letter from the state of maryland informing her she owed around $5000 for a fine for the supposed lapse in coverage from 1995. At the time she was going through life saving medical treatment and she wasn't able to challenge this .........she heard nothing else from Maryland. Then ironically a few weeks before we were about to file for our bankruptcy we got another letter from the state of maryland regarding the same debt. I included it in my bankruptcy and as it was an old state debt, I thought it could be discharged. Of course when i got my discharge there was no listing of what was not and what was discharged. This year we got our refund from the IRS with no problem so i assumed that it had been discharged as we again heard nothing.
Anyway, yesterday we get a letter from SSA to inform us that the state of maryland had taken the $250 stimulus payment (my wife is on disability) she was supposed to get.

I am really concerned because I presume that this debt was not discharged...........is there anyway to fight this by getting my case reopened or did I have to make a case to the judge while my bankruptcy was open. Is it worth getting a lawyer to fight this or is it simply too late?
Thanks for any advice.

[JoeBankrupt33]

For sure, state income tax can be discharged, using the same requirements as federal tax. I am discharging some state tax and I spoke with the state to confirm that the debt is going to be discharged.

I found this in US code 11, 523, describing non-dischargeable debts:

(7) to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty—
(A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or
(B) imposed with respect to a transaction or event that occurred before three years before the date of the filing of the petition;

But... you can try to decode this.

[JoeBankrupt33]

After reading this over many times, and trying to find more info on the internet, it doesn't look good for you.

Pretty much, if it is a fine or penalty payable to the state, the state benefits from the money, and it is not to compensate the state for actual expenses, then it can't be discharged.

[biotechsolution]

Filed Chapter 7 no asset, pro se, Vermont June 2008, Discharged October 2008

I read on this website that some federal back taxes can be discharged if they meet a certain criteria. Can anyone tell me whether state taxes or levies or fines can be discharged. The situation is this, in 1995 my wife and her first husband were accused of a lapse in insurance coverage which wasn't the case according to my wife. She went down to the DMV and at the time she thought she had cleared it up. Then in 2003 she gets a letter from the state of maryland informing her she owed around $5000 for a fine for the supposed lapse in coverage from 1995. At the time she was going through life saving medical treatment and she wasn't able to challenge this .........she heard nothing else from Maryland. Then ironically a few weeks before we were about to file for our bankruptcy we got another letter from the state of maryland regarding the same debt. I included it in my bankruptcy and as it was an old state debt, I thought it could be discharged. Of course when i got my discharge there was no listing of what was not and what was discharged. This year we got our refund from the IRS with no problem so i assumed that it had been discharged as we again heard nothing.
Anyway, yesterday we get a letter from SSA to inform us that the state of maryland had taken the $250 stimulus payment (my wife is on disability) she was supposed to get.

I am really concerned because I presume that this debt was not discharged...........is there anyway to fight this by getting my case reopened or did I have to make a case to the judge while my bankruptcy was open. Is it worth getting a lawyer to fight this or is it simply too late?
Thanks for any advice.

The easist way to figure if it was discharged is if it similar to parking tickets.

the initial fine is not dischargeable but the fine that continues to increase month by month after the due date is dischargeble because that is considered a punitive fine not considered actual compensation.