Tax Debt over Bankruptcy

[mormand]

As I get getting closer to file for a Chapter 13, (too high income to qualify for 7)

I revisited if there's any feasibility in paying all my creditors. My after-tax income will not cover even half of what I owe in monthly payments.
I need $7K / month to be able to pay back lenders and creditors and avoid filing.

I'm wondering if postponing my tax liabilities to after I pay off all my loans and creditors is a better options. I'd end up owing the taxes, but at least all creditors would be paid. Looking for honest input here, I appreciate all feedback.

Thanks

[justbroke]

Owing the IRS is worse than owing unsecured creditors. Even though I just wrote that, the real issue is throwing away money in an attempt to payoff creditors. If you do hae sufficient income, a Chapter 13 is the perfect vehicle for this. If you have a lot of disposable monthly income (DMI) you may even pay back all the creditors. What you get with a Chapter 13 is that it keeps the creditors at bay and allows you to pay zero interest and, potentially, pennies on the dollar.

There is no other guaranteed debt management system than completing a Chapter 13. Period.

[shipo]

mormand, I agree with justbroke, Chapter 13 is far and away your best option.

[Carmella]

Find a reputable attorney who is experienced in BK 13 in your area. Talk to a few attorneys to find one you trust and is a good fit. The first one I saw told us we couldn't do BK13 and tried to sell us loan consolidation which ultimately would make him more money and cost us more ways than just cash.

We owed the IRS when we filed and that was put into the plan. It did not accrue interest/fines. The IRS was paid first through the trustee.
We had a plan with 100% payback, but all the creditors (credit cards) did not file a claim, so we actually finished earlier than 5 yrs. We had a very tight budget during the almost 5 yrs of active BK13 it wasn't easy. We had some expenses with our young adult daughter who just graduated college. She was living with us, and we were helping her financially while she had a low paying internship--but legally she was an adult and not our "dependent." If she wasn't still with us, it would have been a tight budget, just not very tight if that makes sense.

I will not tell you it's easy. There is stigma and at least for us there's an emotional side of it, feeling like you screwed up bad. Which in our case was a smaller piece of the situation. We tried to get the debt under control and were not able to do it. Our methods were semi successful followed by relapses when things happened out of our control like decreased income.

BK13 helped us pay off the debt. When dealing with credit cards the interest grows and grows you pay down part, but a lot of your payment goes to interest and unless you can work extra jobs, save up a emergency/"rainy day" fund and just pour all the money you can into payments it won't go down. We were at the point it wasn't feasible for us to pay all that we owed with all the interest that kept growing.
We could have paid off on a very tight budget through BK13 the amount we had in debt without more interest accruing. Some people get less than 100% payback and actually pay back less than what they owe. It's based on your income to determine how much will be paid back in your plan.

It wasn't fun, but it was a way to get the debt out of our lives and actually after filing there was less stress in our lives.