Priority debt collections after discharge and claim question..

[gemsnroses00]

The tax commission is trying to collect since we have been discharged, I'm a little confused because they made a claim on the amount. So they get part of the asset money AND I have to pay them what was owed?

[AngelinaCat]

Unfortunately, yes.

However, looking on the bright side, the monies you paid in to your trustee while you were in BK, has been applied to your tax debt, and what you are paying on now is the remainder--plus interest and penalties, of course. Since you are in Maryland, you have both Federal and State taxes to deal with.

[justbroke]

The tax commission is trying to collect since we have been discharged, I'm a little confused because they made a claim on the amount. So they get part of the asset money AND I have to pay them what was owed?

Yes. Unless your tax debt fit a very specific criteria and the taxing authority either agreed it was dischargeable (and discharged) or you filed a complaint to determine the dischargeability of the tax debt, it is still active.

The tax, while not being collected during your bankruptcy stay, was still accruing interest and any penalties. When the discharge was entered, the taxing authority is then allowed to pursue the non-dischargeable taxes along with the additional interest and penalties. If they received part of the distribution from your (apparent) asset case, then that only offset "part" of what you owe.

If the Trustee paid these "priority" tax debts from proceeds of the Bankruptcy, then I would suspect that these are non-dischargeable taxes and were not discharged. You still owe the total amount due, less what was paid. Please be aware that interest and penalties will continue to accrue unless and until paid. At some point, the taxing authority may decide to use a tax lien, levy, or garnishment to collect.

Are you in a payment arrangement?

[gemsnroses00]

Yes. Unless your tax debt fit a very specific criteria and the taxing authority either agreed it was dischargeable (and discharged) or you filed a complaint to determine the dischargeability of the tax debt, it is still active.

The tax, while not being collected during your bankruptcy stay, was still accruing interest and any penalties. When the discharge was entered, the taxing authority is then allowed to pursue the non-dischargeable taxes along with the additional interest and penalties. If they received part of the distribution from your (apparent) asset case, then that only offset "part" of what you owe.

If the Trustee paid these "priority" tax debts from proceeds of the Bankruptcy, then I would suspect that these are non-dischargeable taxes and were not discharged. You still owe the total amount due, less what was paid. Please be aware that interest and penalties will continue to accrue unless and until paid. At some point, the taxing authority may decide to use a tax lien, levy, or garnishment to collect.

Are you in a payment arrangement?

Thanks guys! Is there away to see how the assets were distributed or will be that is? I have 5 more payments for the buy back agreement. The tax commission sent me an automated bill/payment arrangement. I just pay what I can when I can..

[AngelinaCat]

You probably won't see a listing of how your payments were distributed until after all payments are made. That is the way it worked for us. We were also were an Asset 7 case. We had been on a payment plan with the IRS when we filed. At that point the IRS suspended the payment plan until we were through with the BK (i.e. discharged). Once we were discharged, we received a notice that it was time to start the plan up again. 'Hub called the number on the letter and did so.

Our case was not closed until about 15 months past the discharge date. One of the reasons for that is one of our medical providers petitioned the court to have their claim prioritized above that of the IRS, which was a big no-no. But it took time for that to go through the court process.

Eventually toward the date of closure, all the distributions, and accounting details appeared on PACER. The IRS was the primary creditor, and none of the other creditors got anything of the monies we paid in to buy our assets back.

Unfortunately you have both State and Federal. So I suggest calling the phone number on the form you received and start the payment plan up again, if you had one. Or you need to start one if you haven't had one before.

Good luck!

[gemsnroses00]

Good to know!

You probably won't see a listing of how your payments were distributed until after all payments are made. That is the way it worked for us. We were also were an Asset 7 case. We had been on a payment plan with the IRS when we filed. At that point the IRS suspended the payment plan until we were through with the BK (i.e. discharged). Once we were discharged, we received a notice that it was time to start the plan up again. 'Hub called the number on the letter and did so.

Our case was not closed until about 15 months past the discharge date. One of the reasons for that is one of our medical providers petitioned the court to have their claim prioritized above that of the IRS, which was a big no-no. But it took time for that to go through the court process.

Eventually toward the date of closure, all the distributions, and accounting details appeared on PACER. The IRS was the primary creditor, and none of the other creditors got anything of the monies we paid in to buy our assets back.

Unfortunately you have both State and Federal. So I suggest calling the phone number on the form you received and start the payment plan up again, if you had one. Or you need to start one if you haven't had one before.

Good luck!