Bankruptcy, Adding IRS Debt, and Discharge Objections

June 29, 2010 - PRLog -- When you file bankruptcy, you are in it for three to five years. During this time, you will file your taxes and find that you owe the IRS. The IRS requires payment in full from you. What do you do? You need to contact your attorney’s office to find out what you can do.

In the Northern District of Texas, Fort Worth Division, you can add your post-petition (after filing) IRS debt to the plan. You would have to pay attorney fees for the modification that has to be done and your trustee payments will increase for the addition to the plan. Depending on the amount of debt you owe the IRS, this would be feasible for you to do. Instead of trying to come up with a lump sum of money, you can make payments over the life of the bankruptcy instead.

You may be wondering if you can do this with other debt. The answer is no. You can only do this with the IRS, because they are a priority debt that must be paid. You can not add additional creditors to your plan after the case has been filed. What about property taxes? The attorney’s for the property taxes will not allow that, that debt is incurred after filing, so you have to contact the property taxing authority to make arrangements with them to get this paid back over a 12 month period.

When you file a Bankruptcy case, your intention is to get out of debt and get some relief. In most instances this is what happens, but there are times when you may be faced with an objection to a discharge of your bankruptcy case.

It is more common when filing a Chapter 7 case that a creditor may file an objection to a discharge of your case. In most instances it is because the creditor thinks or has evidence indicating that you “charged up” on a credit card right before filing your bankruptcy (use within 90 days of filing). The presumption is there was a lot of credit card activity in the anticipation of filing a bankruptcy case.

If this happens, you can always defeat the presumption of an abusive filing by showing that the items purchased on credit were either done outside of the 90 day time period or that the items were reasonable and necessary, meaning it was for food, clothing, or household supplies. In most cases, consumer electronics or Lazy Boy chairs do not fall into this category.

If ever faced with an objection to discharge by a creditor, you want to nip it in the bud as soon as possible to try to get it resolved prior to any litigation by the creditor in Bankruptcy Court. However, if you cannot prevent litigation you can always try to settle the matter and pay the debt out over a period of time.

For more information visit http://www.bankrupcy-alternative.com/bk-means-test.html or call us directly.

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