Really old debt from ch7 resurfaced

[poorme]

It's been awhile since I posted here - glad to see this place alive and kicking!

OK - I had a debt for 1992-1993 ad valorem taxes in Virginia (car tags) that was included in my matrix. Filed 10/05, disch 3/06 under old rules. The county in VA was notified and never filed any objection. Now they have contacted me and stated that the debt is still owed under the presumption that taxes aren't dismissable in bk. Of course, with penalties and fees the original $700 bill is over $4k. The debts were 12 years old when I filed.

Is this correct? The lawyer I was using is no longer practicing, but someone suggested I repopen my case and ask the bk court for a clarification on the dismissed debt. Any thoughts or ideas? Yhanks.

[AngelinaCatHub]

OK, without doing your legwork, go into your states Statutes of Limitations. I really doubt that at this time, they have a leg to stand on. Even IRS has a three year forgiveness. Please do your own work but let us know. I can't but would, but very busy for now. Good fortune to you. 'Hub and Mrs.

[justbroke]

'Hub has a very good point on the Statute of Limitations (SOL). However, I'm going to attack this a different way.

If that ad valorem tax was entitled to priority, then unless you opened a Complaint (Adversary Proceeding/AP) to determine the dischargeability of that (ad valorem/non-ad valorem) tax (back when your Chapter 7 discharge was pending), I don't believe that you received a discharge of those taxes.

Having wrote that, though, the real question is whether the tax was eligible for priority under the Bankruptcy Code. I don't think it is, but that's where you'll have to check. If it wasn't entitled to priority, then it was probably discharged.

I believe in all cases, the Bankruptcy Court defers to underlying State non-bankruptcy law. If the ad valorem tax attaches (by statutory lien) to the property, and you still have that property... I believe Bankruptcy Rule #1 of Liens still holds. (Bankruptcy Rule #1 of Liens is that all liens survive Bankruptcy, unless you move to quash/avoid them.) I suppose that you don't even have that property (the car) anymore?

You may want to re-open your case ($260) to ask motion to determine that the taxes were discharged. It's probably your best bet. However, I'd say that using a lawyer, may cause you to spend $$$ to get it discharged, but may be worth it.

Of course your other issues are that the debt collection tolled while your Bankruptcy discharge was pending, and I see you are in Kentucky now, so it may have even tolled more. If you want to attack it on a SOL deal, you'll have to determine the tolling affects upon the debt as well.

Just thinking out loud.

[AngelinaCatHub]

Justbroke.. OK, Wow!

'Hub I defer.

[music12]

justbroke,

when you say

"If the ad valorem tax attaches (by statutory lien) to the property"

which property do you mean? the OP didn't say anything about any property being seized, just about them trying to collect.

[justbroke]

when you say

"If the ad valorem tax attaches (by statutory lien) to the property"

which property do you mean? the OP didn't say anything about any property being seized, just about them trying to collect.

The OP wrote that the ad vaolrem tax was for his "Virginia (car tags)".

[music12]

The OP wrote that the ad vaolrem tax was for his "Virginia (car tags)".

ooopse, i missed that, probably because i know nothing about liens on car tags!

does it mean they can repo the tag?? is that the same as the license plate? which is worthless to the state but makes it impossible to drive the car?

[justbroke]

ooopse, i missed that, probably because i know nothing about liens on car tags!

does it mean they can repo the tag?? is that the same as the license plate? which is worthless to the state but makes it impossible to drive the car?

I don't know, specifically, how that works. They already own the tags. I believe the tax is levied against the vehicle (property) itself. So, the lien would be on the vehicle.

[poorme]

Thanks everyone. I believe the liens attached to the property ( the cars). But they are both gone. One burned in a fire and the other was scrapped after the engine blew out. I'm considering making a settlement offer that would be about the same cost as opening the case and filing a motion to determine dischargeability - we didn't do that while the case was pending. Lawyer said it was too old and we were more focused on old IRS liens at the time which did get dc.

[Rick9972]

I don't know, specifically, how that works. They already own the tags. I believe the tax is levied against the vehicle (property) itself. So, the lien would be on the vehicle.

Some states the auto tag belongs to the person (Ohio). Meaning when you sell or trade a vehicle you take the licence plate off and put it on your new vechicle.

Other states (Kentucky and Virginia) the auto tag (license) belongs to the vehicle and the plate stays with the vehicle. This plate has to be updated each year, if it is not updated you cannot get a license for another vehicle until the taxes are all paid and the tax lien released on the previous one.

[AngelinaCat]

In Florida, the tags belong to the person, unless you specifically do paperwork to transfer one to someone else.

To the OP, if the IRS liens got discharged, I would think the state liens would have too. Though states, like BK districts, are a little different.

We have been discharged, and an old medical debt keeps rearing its head trying to get payment, even though that debt was discharged. Also the medical group tried to have their claim prioritized over IRS, and the trustee would not allow it.

Good luck!