Schedule D, Creditors holding secured claims

[1MoreTime]

Hello.

I have a few questions. I have both the IRS and a judgment creditor respectively getting and seeking wage garnishments.

Both go on schedule D I believe as a result. However, as I have no property, house or car, would any portion of these debts be considered unsecured? I would think all since wages from work are not guaranteed, I could retire tomorrow theoretically. Or am I just over-thinking here and the entire amounts should be considered secure?


The judgment creditor is seeking to garnish wages, but because of the IRS levy, there is nothing for them to take at the moment. Would they still need to be added to the statement of financial affairs as an administrative action that has taken place in the last year? Would the status or disposition be listed as a judgment?

Thanks for your time. I am sure more questions will follow as I fill out the rest of these forms.

[despritfreya]

Unless actual liens were filed (not levies or garnishments) neither are Schedule D creditors.

The IRS, for taxes that are less than 3 years old, belongs on Schedule E (priority unsecured creditors) and the judgment belongs on Schedule F.

To the extent either has seized wages or property, such garnishments/levies are listed on the Statement of Financial Affairs, questions 3 (if they got more than $600 in the 90 days prior to filing) and 4. If a law suit has been pending in the past year, that suit is also listed on question 4 with the current outcome.

Des.

[1MoreTime]

I misread what Nolo was saying but I see now.

What about taxes over 3 years? I was off the grid for awhile...yes i did file at the time they were due.

And if not then they are just listed on the appropriate schedules. Got it.

Thank you so very much.

[despritfreya]

If the taxes meet the test for dischargeability and no liens were filed, they are listed on Schedule F.

Des.

[1MoreTime]

Unfortunately there are liens on all back taxes. Heck I even found out I failed to file in 2009 (what a mess life was)...and owe even more, no idea yet what the IRS will tack on for late filing and interest/penalties. Oh well, at least its not a huge sum of money.

But I own no property the IRS would want...though I understand the liens still exist on personal property.

The garnishment is eating up all of my disposable income, and is preventing me from moving out of my Mom's place to get an apartment of my own. That is the main reason I want to file.


As far as the garnishment is concerned, since it started in June of 2012, should that be put on #4a of the SoFA? Date of the notice to levy from my job is June XX 2012. Can't quite figure out if this is covered under "administrative proceedings".

I borrow one of my Mom's cars and its listed on the statement of financial affairs # 14. That way I can include gas, insurance, maintenance on my monthly expenses.

I understand that because I live with my Mom, I need to include that information even though she does not pay for anything directly, other than providing a place for me to sleep. Can't recall where to this information goes at the moment. I do use all of my income to help around the house, food, utilities, etc...

Also under Schedule J, if I plan on renting an apartment, this information would be included under 19 for any anticipated increases in expenditures. How closely does the trustee look at this? Obviously my expenses will increase dramatically once I am able to move out.

Thanks much.

[HHM]

Don't confuse the issue with IRS.

There is a difference between the IRS "statutory lien" and the IRS having a "perfected lien"

Strictly speaking, if you owe tax, didn't pay it, and the IRS demanded payment, the IRS has a "statutory lien". However, to be a secured debt for BK, the IRS must FILE a notice of lien either at your county recorders office (to perfect a lien against real estate) or at your states Secretary of State office to perfect a lien against all personal property. If the IRS has not FILED any liens, the tax debt is unsecured. If the tax debt is unsecured, then all you need to do is figure out what tax debt is priority (non-dischargeable) and is non-priority.

[1MoreTime]

Ahh thanks so much for that, that clears my mind on this issue. I'm going to have to read a bit more on that aspect of liens. The IRS only told me that they have liens filed, but I haven't owned any real property for them to perfect on, so they must be statutory. But I will confirm with the court/s when I get my credit reports this week.

[HHM]

Not quite.

If they have filed liens, then they have "perfected" liens. Also, liens attach not just to real estate. If the liens are filed at the Secretary of states office, then the liens attach to ALL personal property (and exemptions do not apply), so that means the liens attach to your furniture, retirement accounts, vehicles, etc. So, if the IRS has filed liens, the issue is determining the value of the liens (e.g the value of your assets). Now, if all you really have is misc. household items and clothing, the IRS will usually release the lien as part of the BK process (assuming the debts are dischargeable), but you need to ask them to do it.

You really should just hire an attorney at this point, why are you wasting YOUR valuable time actually trying to figure it out. There are more important things you can be doing.

[1MoreTime]

The question of just hiring an attorney is likely what I will have to do. Its really a money issue that is preventing me from doing so and I don't want to wait 4-6 months to finally have the funds to pay one. Insomnia, depression and anxiety are what got me into the mess in the first place and I don't want to risk going back there. And so I am taking my time, reading and trying to figure this out. The IRS issue being the biggest of the big fish.

Thanks for your help and advice.

[LadyInTheRed]

IMO, a history of insomnia, depression and anxiety is an argument against filing BK without an attorney. The IRS is already garnishing your wages and you have no assets. So, there isn't a lot the judgment creditor can do. You just need to keep cash out of the bank. The IRS is a big fish indeed and you don't want to risk making a mistake. Perhaps for the next 4 to 6 months you could focus your attention learning how to deal with the creditor. That's an easier task than filing a pro se BK.

You are in Colorado, right? You can search to see if the IRS has filed a lien against your personal property at https://www.sos.state.co.us/ucc/page...ardSearch.seam

[1MoreTime]

Thanks so much for the Colorado link. I was focused on NJ my former state where I believe the IRS has something filed against me.
There is nothing for Colorado...yet from any creditors. Good news I guess.

I am still waiting for some information from a credit reporting company so I can see what exactly is on my credit report. I had a free one less than a year ago but it was stored on a pc that required a software re-install so bye bye. I really don't recall what was said on the credit report about the IRS or the others except one judgment.

[OHBOY]

Not quite.

If they have filed liens, then they have "perfected" liens. Also, liens attach not just to real estate. If the liens are filed at the Secretary of states office, then the liens attach to ALL personal property (and exemptions do not apply), so that means the liens attach to your furniture, retirement accounts, vehicles, etc. So, if the IRS has filed liens, the issue is determining the value of the liens (e.g the value of your assets). Now, if all you really have is misc. household items and clothing, the IRS will usually release the lien as part of the BK process (assuming the debts are dischargeable), but you need to ask them to do it.

You really should just hire an attorney at this point, why are you wasting YOUR valuable time actually trying to figure it out. There are more important things you can be doing.

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Please forgive me, perhaps I am a little 'thick headed'... Does the recording of a lien, OTHER THAN AN IRS LIEN, with the Secretary of States office also mean that exemptions do not apply ?

[HHM]

Please forgive me, perhaps I am a little 'thick headed'... Does the recording of a lien, OTHER THAN AN IRS LIEN, with the Secretary of States office also mean that exemptions do not apply ?

Generally no, the reason exemptions don't apply have to do with the nature of the debt not with the fact that a lien was recorded. No exemptions apply to tax debt. However, run of the mill debts (credit card judgments), exemptions still apply.