Good news - bad news. Need some of the "pros" to help

[catleg]

Just because a debt is non dischargable doesn't mean it's collectible.
Do you have a job?
If yes they would figure to get a wage garnishment.
If no how are they going to get the money from you.
If you have a job, I'd counteroffer 50%, if no job, 25%.

And I'd again throw out to the brain trust, do you think this is any different since it's a property tax?
They are a very sharp creditor to have noticed this after 7 months.
Didn't you make any payments?
Who is this HSBC?

[justbroke]

Anyone else with other thoughts on waiting for the AP?

I would never suggest settling a non-existent Complaint (Adversary Proceeding/AP). If it doesn't exist, then, in my book, there is nothing to settle! I will always stand by the saying that threats of filing an AP or conducting a debtor's examination under Rule 2004 are just that, threats.

Unless and until a creditor/plaintiff actually files one, there is nothing to discuss. It is actually a strategy that works for most people! Many times you will read here on BKforum that debtors are panicked over the threat of an AP. The creditors know this and pass these "settlement agreements" along all the time! With consent and counsel of an attorney, I would ignore them. That doesn't mean that you shouldn't have a strategy should they choose to file it.

[tobee43]

Yes, it would be dischargeable if it had fallen under the exceptions in 11 USC 523. The argument of the creditor, that ended up holding the bag because you charged the tax or used an "access check" to pay the tax, is always that the tax, itself, is non-dischargeble.

To be able to claim that the tax is not dischargeable the tax would actually need to not be "recent" (due within last 3 years, assessed within 240 days of filing, and for which a return -- if required -- was filed within the last 2 years before filing).

justbroke's discussion topic: Please be aware that not all creditors catch this! I'm starting to wonder what a creditor's recourse would be had they discovered this after the discharge was entered. Or, on a different angle, what would happen if the creditor had known that there was a non-dischargeable charge before the discharge was entered, but they failed to file a complaint to determine dischargeability before the bar date.

justbroke's reading suggestion: An awesome case on the issue where it related to a tax due the IRS. The debtor charged it to their credit card, but later, the IRS found an error and then sent a check for $2,700(+) to the debtor since no tax was due. Plaintiff (creditor) wanted the debt charged to the credit card to be non-dischargeable since it was used to "pay a tax". The argument used was that they "paid a tax", but since no tax was due, the debtors didn't "pay a tax". In Re. Rollings, 7-07-11657 SL, Bankr. N. Mexico 2009.

ahhhhhhhh.....re: rollings v chase....LOL!! haha...my favorite bank. your posts does about as much justice (that's a pun?) to this OP's question and as direct on point ...i think it's right on point actually.

extremely interesting case....

"The question is whether the tax in this case would have been a § 523(a)(1)(A) nondischargeable tax, or perhaps more accurately, whether there was a tax at all in this case."

how could chase even THINK they had a chance once the money was handed over to the trustee.....hope they didn't have to pay their atty and CHASE rec'd a whopping bill from the rollings atty!

thanks again jb, this information, a great read and even more accurate info to file in the old brain.

[albacore44]

I charged 2 property tax installments $4k each to B of A, and Wells fargo cards about a year prior to my filing. Made a couple of payments to the cards before I stopped them all. when I had my discussion with my attornery (and he was a knowledgeable, good one) he asked me if I had paid any taxes with CC. I said yes, property taxes. he said that the court had not yet ruled that property taxes were not dischargeable, only income taxes. He seemed unconcerned. the bank could be bluffing to see if you will bite.

[tobee43]

How much did you charge and, how soon did you default after you made the charge?

it cost us approx $1400 because it was an complex situation. the atty put a ton of time and argument into the motion. i know someone in new jersey that had a few...and i guess she got a discount because she pd $700 per AP.

it was pertaining to a non-secured loan against receivables so it was an on going lending situation with a bank ....almost like factoring. however, the last "monetary" exchange i would say was at least a year prior to filing. ( and there was also a S corp involved). so it got crazy.

it was a few months that we rec'd the signed order from the court that we had won.

[panda]

Justbroke, I agree with you about the AP, but have read that sometimes others had settled when first approached, which I never understood doing until after the AP is filed.

Hopefully nothing will come of this for the OP and all of this will just be a bunch of interesting talk on this topic.

[justbroke]

Justbroke, I agree with you about the AP, but have read that sometimes others had settled when first approached, which I never understood doing until after the AP is filed.

It is a strategy. Think of it this way. The plaintiff/creditor is trying to save money by not dragging it through the complaint process. It's slow and sometimes unpredictable. The defendant/debtor has to weigh their chances of whether the creditor will actually file the complaint (initiating the adversary proceeding), and if the creditor does, how does that change the negotiating position and percentage for settlement purposes.

It's the art of litigation, if you were to ask me.

[catleg]

For sure, it's a gamble for the lender of throwing good money after bad.
That's why I asked if you have a job, at least on your petition.
No job = bad gamble for them.
This sounds like the tactics used by HSBC against Best Buy card holders electronics purchases after they file BK.