Violation of Stay

[bella22]

Question I filed chap 7 in sept.2007 I had a loan with my employer that attorney listed as priority debt sent my employer a letter stating I would pay but the u.s trustee stepped in and said no non priority non secured-debt no payments so it was corrected on my means test .My employer stopped taking payments out of my check for one week then threatened me saying if I didn't pay I would not be employed any longer so I needed my job so I couldn't do anything without losing my job (now they say I wasn't threatened ) so in sept of 2010 the financial dept said I needed to resign new papers I asked why and was told to sign them or be terminated well I needed my job and health insurance due to being diagnosed with a life threating illness in march of 2010 also this debt was discharged in feb 2008 so I left my job a few months back and former employer calls me asking how I intend to pay my loan back so that irritated me so I have gone to 3 attorneys and explained the situation all of them can not believe my former employer would disobey a federal court order of discharge and violation of stay and threaten me with termination and even call me after I quit to try to collect and attorneys agree that these are some pretty serious violations even though its been 8 years is irrelevant the broke the law every time they took a payment out of my payroll. I paid this because I needed my job and health insurance we are talking about 60k I have paid back. All the attorneys agree actually which is unheard of any thoughts

[df04527]

Wow... Did the attornies not want to persue it?

Someone with more helpful info will come by and help you out I'm sure but what state are you in would be helpful to know.

[bella22]

Yes all 3 attorneys will take case in a heart beat deciding which one at the present moment all 3 are very good they all have done research and are just shocked that a company would do this

[bella22]

In Ohio

[LadyInTheRed]

Have you hired an attorney to pursue this?

[bella22]

Ok here we go I have to pay retainer to attorney 1k former employer has taken over 73k out of my paychecks dating back to oct 2007 until I resigned attorney is sending a letter to the them asking for repayment and if not then we reopen case they wont even supply me with a breakdown on payments thankfully I keep pretty accurate records. I tried to be fair until they called me and asked how I intended to repay my discharged loan really wth !!!

[bella22]

Well here is the update on this fiasco going to settle out of court all my payments taken out of my payroll that were taken out post tax will be returned so now the question is Can I be taxed again on settlement amount I have all my paystubs for many years showing loan payment was after taxes any thoughts .

[justbroke]

Well here is the update on this fiasco going to settle out of court all my payments taken out of my payroll that were taken out post tax will be returned so now the question is Can I be taxed again on settlement amount I have all my paystubs for many years showing loan payment was after taxes any thoughts .

bella22 when taxed, based on IRS Form 1099-C Forgiveness of Debt, the tax is on the difference between what you owed and the settlement amount. This is taxed as regular income because you receive the benefit of the diference between the debt and the settlement.

For example, say you owed $2,000. Now let us say that over 12 months, they took $50/month as a garnishment. Say that you then wettle for $1,000. The problem is calculating what you actually owe because even though there was a garnishment it may have included or not included interest. In any event, your settlement should show what you owed when the settlement was created, and what they will forgive. If the settlement says you owe $2,400 (could be, due to interest) and yo settle for $1,000, then that's a difference of $1,400 to be taxed. It wouldn't matter what you paid after-tax because the settlement amount and the balance on the date of settlement are what is used to determine the forgiven amount for 1099-C.

At least, that's how I understand it.

[bella22]

I understand that really not to worried since I am settling for less then what I paid them back after tax probably around 10k less not including interest charges I could fight them longer and reopen bk and just go for a lot more but I just want it done and over with out dragging it out any longer