Claims question in an asset case

[southernbelle]

If a priority creditor does not file a claim in an asset case for taxes, will it get discharged along with all other unsecured debts? I read articles that contradict each other on this issue and was curious.

[AngelinaCatHub]

IRS is always priority. They will get their due, but you will be relieved of some penalties and interest. 'Hub

[southernbelle]

In my case, the IRS was the first to file their claim, but I read an article that said that if I were a No Asset case, filing a claim wouldn't matter one way or the other, it's still a non-dischargeable debt, but I have 2 other taxing authorities that haven't filed claims yet and I was wondering if that affected their status to claim "non-dischargeable" if they don't file a claim in an asset case. Granted my assets won't amount to much, but it's still something.

It wouldn't matter to me normally, but I've heard that in my state, the taxing authorities are slow if they act at all to collect after BK, but my paranoid nature can't allow me to make assumptions.

[AngelinaCat]

If I may ask, what state is it, and what are the taxes?

[rustyjanice]

What is an Asset case vs. a no Asset case?

[HHM]

Filing claims and dischargeability are completely different things.

If a creditor with a non-dischargeable debt does not file a claim in an asset case, it does not lose its status as a non-dischargeable debt.

[AngelinaCatHub]

We are spoiled in Florida as FL and TX and several other FEW states have no State Income Tax. I expect that to come Rep or Dem, one day soon. I could not answer that as I am sure some local state laws would apply. Might go to your state's Statutes and look it up online if you can.

HHM (one of the best) is right as in let's say, child support, and most student loans are not forgiven and criminal fines are not at all. This goes for misdemeaners too like speeding tickets, etc.

About an asset case and non-asset. We owned more property than allowed in C7, therefore we are asset case and had the option to forfiet to auction or buy back. If you meet the bare minimum of allowed things, you are non-asset. 'Hub

[southernbelle]

If I may ask, what state is it, and what are the taxes?

Louisiana. Trust Fund taxes (for sales and 941 Employment taxes)

Thank you HHM (I agree also, one of the best). I was wondering about that issue since there is so much conflicting information on the web these days.

[southernbelle]

What is an Asset case vs. a no Asset case?

An asset case: means you have non-exempt property that can be liquidated by the Trustee to pay some of your creditors.

No Asset: the most common type chapter 7 in which there are no assets to liquidate and your debts are discharged without creditors receiving monies from non-exempt assets you own.

[rustyjanice]

Thanks, for explaining Asset case, Southernbelle. I'm having a hard time understanding a lot of the legal terms. I speak Southern, not Legal.....

[southernbelle]

I hear ya. After many many months on this forum and tons of questions, I feel like a paralegal. I would have been up a creek without this forum.