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
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
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
Ninety-nine percent of bankruptcies are “no-asset” cases. The Trustee talks to the debtor, looks at their schedules, and determines that the debtor truly has nothing worth selling. Read more »
July 16, 2021
Timing matters in bankruptcy. For example, if you have seasonal fluctuations in income (like teachers and realtors), then at some times of year your income may be too high to qualify for bankruptcy. But, if you wait a few months, your low-season income may qualify you. Read more »
May 20, 2021
It’s horrible to have a loved one die. But sometimes the death comes with a silver lining in the form of an inheritance. However, for someone with lots of debt who’s considering bankruptcy, an inheritance is a mixed blessing. It’s money that their creditors want, and are legally entitled to take. Read more »
May 12, 2021
Many people are concerned that filing for personal bankruptcy means losing everything they own. After all, in 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 >>
April 19, 2021
