Some input please

[2Bfree]

First off - good forum. Maybe some of you can offer some insight. Finally went and talked with an attorney (only one so far) and trying to figure out which to file 7 or 13. This forum has helped in understanding the difference between the two and the "only reason" to consider 13 is back taxes. What concerns me as some of you can relate to is that if your at this point you just want it to be over with. I may owe about $25-k in past taxes and was wondering if doing an offer in compromise with the irs and then doing Chp-7 (if this is possible). My regular debt might be below 30-k. It is just the unknown $ amount of the total debt strectched out for 3 to 5 yrs doing the 13. I avg around 55-k per yr. minus $8-k for child support leaves $47-k before taxes. Is there a way to determine your payment? Of cousre the lawyer said regarding taxes "if we don't have to fight them - irs" meaning more money. Thanks!

[BKTango]

How old are these tax debts? That answer will help determine what you should do. Of course providing you make below the median for your state, you can file a chapter 7. If you make above the median for your state you must take the means test. There are certain instances where personal income taxes are dischargable in bankruptcy, but it helps to know how old they are. If at all possible you might want to set up a few more consults with some local bk lawyers in your area, they might provide a clearer outlook.

[lrprn]

Welcome to BK Forum, 2Bfree - glad you found us!

This forum has helped in understanding the difference between the two and the "only reason" to consider 13 is back taxes.

Certainly not the only reason for filing Ch 13, but a good one.

I may owe about $25-k in past taxes and was wondering if doing an offer in compromise with the irs and then doing Chp-7 (if this is possible).

You can work out a payment plan with the IRS before filing, but ALL your debts, including your taxes, must be listed in your bankruptcy. You don't get to pick and choose.

I avg around 55-k per yr. minus $8-k for child support leaves $47-k before taxes. Is there a way to determine your payment?

The key here is which state you live in and how your income vs. expenses come out on the required Means Test. That is the only way to know if you can file Ch 7 vs. Ch 13, and if it's Ch 13, then the second part of the Means Test will be what determines the amount of your monthly payment.

So....what state do you live in? How much secured vs. unsecured debt do you have? Do you want to keep any assets like your house or cars? Are you still using your credit cards? It will help us help you more if you can share a little more information.

[Granny]

An offer in compromise will extend the statue of limitation for collection as does bankruptcy, but it extends it more than BK does. If you can't complete the offer, you have effectively given the IRS additional time to collect. Filing the OIC gives them an additional year plus the time the OIC is under consideration, regardless of whether it is accepted or rejected. This amounts to an additional 18 months, give or take.

What they want in an offer is:
1. The cash value of all your assets (at garage sale prices)

plus

2. The excess money you have left each month after the IRS standards are deducted from your income. You will pay this for 60 months, but they prefer that you pay the 60 month amount as quickly as possible. They do not allow you to pay unsecured creditors before them, so you will ruin you credit if you haven't already. You are only allowed to deduct very specific amounts from you income, certainly nothing that is not court ordered or secured or needed to produce income.

The standards used in bk is based off the IRS standards, but BK is more lenient than the IRS standards. For instance, it is possible to have an allowance for entertainment in a BK but not in an OIC.

BK allows you to pay only the tax and not penalties and interest. In an OIC, you could be paying some of those penalties and interest.

If the taxes are personal income taxes, timely filed and old enough they can be discharged in a chapter 7. That's why BKTango wants to know when they were filed.

Hope that helps. Good luck!

[2Bfree]

The taxes are from 2000,01,02. May have been filed in 02.
I live in Florida.
I have no secured debt. Just a truck - which was told by Lawyer quick sale of 1500.00
Credit is pretty much shot.

Thanks much for all of your responses - are you all Lawyers yourself...just want some relief. I read where all these other people are already discharged and those that are close - happy for them.

[lrprn]

The taxes are from 2000,01,02. May have been filed in 02.

If the income tax debt meets all five of these rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions:
-The due date for filing a tax return is at least three years ago.
-The tax return was filed at least two years ago.
-The tax assessment is at least 240 days old.
-The tax return was not fraudulent.
-The taxpayer is not guilty of tax evasion.

Talk to your/a bankruptcy lawyer - your taxes *might* meet these rules and be dischargeable.

Thanks much for all of your responses - are you all Lawyers yourself...

No - no lawyers here (at least no one who admits to being a lawyer ) Just a bunch of knowledgeable regular folks who have filed bankruptcy themselves, some who have done a tremendous amount of research to learn as much as we can about it, and good souls who are willing to share what we've learned the hard way. We don't offer legal advice - we can't because we aren't lawyers.

Your own lawyer's advice is always best because he/she knows the law and also knows the local customs of your bankruptcy court and lawyers. We can sure help you learn the right questions to ask though