Questions

[kenshirley]

I have two questions for ask for someone else facing this.

Under what circumstances is an IRS Debt that they are making payments on dischargeable. They will be a no assets case under chapter 7 and the debt is for taxes that were due last April and the years 2004-2007 that they make payments on.

Also, I assume that a 2nd mortgage is dischargeable in a chapter 7? They are going to try to keep the house if they can with the primary mortgage.

[NoMoreCards]

I don't believe a second mortgage is strip able under a CH 7, as long as the combined loans equal (or are close) to the value of the home.

I could very well be wrong and those that have more experience could say for sure. It might be dependent on your state and values of the home vs. values of the mortgages.

To help others better answer your questions, providing that information might make it easier for them to help you.

[kenshirley]

They are upside down by the total value of the combined first and second loans by $50K right now.

[justplaintired]

I know in our case, we are paying both 1st and 2nd after BK. However we are not upside down on the loan. We owe about what the house is worth now. Maybe even $5K in equity!

[NoMoreCards]

I know typically a second is not stripable in a 7. However what the deciding factor seems to be is the value of the mortgages vs the value of the house. If the OP is underwater by 50K, I do think he might be able to strip the second. But that is simply based on my very limited experience, in the state of Michigan.

[kenshirley]

Any comments about IRS debts that date to 2004-07 that they are making payments on?

[tdawg]

tax debt less than 3 years old is definitely not dischargeable. So, for anything filed after 9/25/2006, they'd be out of luck. i.e. 2006 and 2007 years are not dischargeable, but 2004 and 2005 could be depending on when they filed, if they filed for OIC, and if they meet all the other conditions.

[kenshirley]

OK, thanks, it appears that they would be stuck with the debt for about half of it anyway.
That could reduce their payments some.

[kenshirley]

Well at this point the house makes no difference.
They have decided to file and surrender the house and that's a good thing for them in this case.

[jribe]

I have two questions for ask for someone else facing this.

Under what circumstances is an IRS Debt that they are making payments on dischargeable. They will be a no assets case under chapter 7 and the debt is for taxes that were due last April and the years 2004-2007 that they make payments on.

Also, I assume that a 2nd mortgage is dischargeable in a chapter 7? They are going to try to keep the house if they can with the primary mortgage.

a second mortgage is secured by the house; so their only options are to negotiate with the 2nd lien holder; do a chapter 13, or let the whole house go- and then both loans will be discharged.

As far as IRS debt- if it's more than 3 years old - it is generally dischargeable. As long as there was no fraud involved in the tax owed.