Chapter 7 Filing and Existing DDIA

[Fresh]

Hello,

I filed Chapter 7 earlier this week and I have a question about an existing direct debit installment agreement (DDIA). My filing is for medical and tax debt. I called the IRS bankruptcy section a few days after filing and the person had to manually place the filing on my account because it had not been picked up. He could see it (I guess via PACER) and processed it. My DDIA is due Feb 28, but he told me that most likely with the filing, there would be nothing taken out of my account. He said on the off chance that something was taken out, it would be replaced within a day or so. That's part 1.

Part 2 is whether it's true that your DDIA remains intact through the bankruptcy and starts again once the bankruptcy is done. If that's true, I do not want that to happen because I think most of the taxes will be gone, but you have to wait to see what the IRS says.

What I'm wondering is whether I need to just cancel the DDIA this month.

Any advice would be appreciated.

[justbroke]

You did the right thing by calling the Insolvency department. If your IRS tax account was properly marked, then your online payment agreement (OPA) should be cancelled, and the upcoming debit (DDIA) should be cancelled as well.

If you have a way to manually do this, then I would go ahead and manually cancel the DDIA. You may find that it won't let you cancel the DDIA and/or OPA because they are already canceled or in a status that prevents you from touching them.

It is not true with payment agreements. Once bankruptcy is filed, they are canceled. They do not restart at all. If a debtor needs to "restart" an OPA after a Chapter 7 discharge, then the debtor has to take positive steps to seek a new OPA with direct debit.

[Fresh]

Thank you so much!! I feel much better. I appreciate your knowledge and kindness.

[AlohaAZ]

Im in an OPA and I manually pay the IRS. this month my attorney told me not to pay it because it will be discharged. Freaked me out becauSe I don’t play around with those folks they will take your kidneys if they could lol but few weeks later I got a letter from IRS saying they are aware of my filing and I’m not obligated to keep paying also that if on direct debit it will be cancelled. Hope that helps some!

[Fresh]

You are a kind soul for posting this. Makes me feel so much better.

[justbroke]

I have found the IRS, while tough, to be extremely knowledgeable about bankruptcy and you generally have no issues with them. They know the game -- the Insolvency Department does -- very well when it comes to tax debt. It's all they do all day.