I can do a 7 or 13 with my tax debt

[topekajack]

My attorney (I finally have one that I am comfortable with) is pushing me a bit towards a 13; however, I qualify for a 7 (even though I am well over the median). Basically, in a nutshell, if I file a 7 I will still have to pay the IRS $1,000/mo for 5+ years. All other debt is discharged. If I go with a 13, I will have to pay $1,000/mo for 5 years to the IRS (via the trustee). There is no money left over to pay other debts. The IRS must get paid so everyone else gets in back of the line. So, he feels that a 13 would be better because all penalties and interest would cease. If I pay the IRS outright after a 7 I will end up paying a good bit more because of the penalties and interest.

My brain is saying go with the 13 because I will save money in the long run. My heart says 7 because I will be free and clear of the other debt and I wouldn't have to live under the auspice of the government for 5 years - even if it means paying more money to the IRS in principle and interest.

What would you do? Thanks for all of the help.

[HHM]

Your brain is right...your heart is being stupid.

A chapter 7 only makes sense if you would be an "asset" chapter 7 and the assets of that case would pay the tax liability; otherwise, a Chapter 13 is the better way to go if you have priority tax debt, ALWAYS.

[krielly]

I agree. If you are going to have to pay that amount regardless, it makes much more sense to do a 13. An additional bonus for you down the road is that a completed 13 will clear your credit in 7 years. A Chapter 7 will remain for 10.

K