Tax debt is dischargeable in bankruptcy. However, unlike many other nondischargeable debts (fraud, malicious tort, etc.), tax debt may actually remain in force with no further word from the court. Huh? The IRS or the FTB could come back five years after the discharge and start collecting on taxes Read more »
November 24, 2021
Business owners with payroll tax debt often ask me why the IRS won’t lift its levy or lien. After all, these clients argue, I just need a bit of free cash to invest back into my business, to make the money to pay what I owe. If the IRS cripples my business with liens or levies, then I can’t make the money to repay them. So, why doesn’t the IRS act more like my business partner, let me continue to operate, and make the money to pay them back Read more »
November 16, 2021
In chapter 7 bankruptcy, everything you own and owe is briefly transferred to a bankruptcy Trustee, who can then use your assets to pay your debts. If you have more debts than assets, then those debts are “discharged” or wiped out (there are exceptions for some debts… Read more »
November 4, 2021
You file bankruptcy to get rid of debts you can’t afford to pay and to get the fresh financial start in life that you so desperately need. But not all debts can be wiped out in your bankruptcy. Read more »
October 25, 2021
Here’s something I discuss on the landing page of my website, because I think it’s that important: I’m assertive but not antagonistic. Okay. So what? Some clients are so angry with the IRS they want to use me primarily for revenge, even if their case would have a better outcome if we approached the adversary calmly Read more »
October 13, 2021
A potential client called me last week for help in dealing with the IRS. He owes taxes for 1992 to 1996. Had he filed the returns on time? Yes. Had he filed bankruptcy in the meantime? No. Had he filed an offer in compromise? No. Has he heard anything from the IRS in the last three years? No, but he thought that was because he had moved Read more »
October 4, 2021
Since the fall, I have seen a big uptick in desperate people calling me for tax or bankruptcy help. What kind of desperation? These people have been either on the IRS’s radar, or been having debt problems, for many years and then the crisis hits: the IRS puts a lien on a house, or a creditor gets a default judgment and the sheriff Read more »
September 23, 2021
It’s possible to discharge (have tax debt wiped out) most federal taxes in bankruptcy. There are exceptions, however. Many of the times when taxes aren’t dischargeable in bankruptcy are very straightforward, but one is open to interpretation and thus quite murky. Read more »
September 13, 2021
If a debtor sells property for less than full market value before filing bankruptcy, the law considers this a form of theft from the bankruptcy estate: the Bankruptcy Trustee could have sold it for more money to pay off the debtor’s creditors. But, sometimes Sebastian the Feline Paralegal’s explanations are more fun to read. Read more »
September 3, 2021
When you file a a chapter 7 bankruptcy, everything you own and owe is legally transferred to a Bankruptcy Trustee, who can then use your assets to pay your debts. Read more »
August 26, 2021
