My wife and I must file bankruptcy – we need some advice?
We live in Washington. We own a home that has 95K in equity – but we owe the IRS about 85K. We have gone through the pre bankruptcy counseling and they say we HAVE to file – because we are in the hole 6K per month (long story – I owned a business and got very ill). My income is commission only – and I don’t have commissions coming in which is why I need to file Pro Se’. Basically – do I let the trustee sell my house? Do I need an attorney to make sure the taxes are discharged (they have been owing for over 3 years and over 2 years since I’ve filed – and also the 3rd rule I’ve passed too) because that would be horrible to walk away without them discharged. I have 2 cars I want to give back. If I file now – how long can i live in the home and when do I need to surrender the cars ? I don’t want to milk the system – I just want to find a place to live and have enough time to earn a commission (should be 30 days away)
They may have changed the rules – but I know you can do it pro se. The reason I would even try is I used to be a creditor rep that goes to court and I reviewed every petition to find fraud. I know most things – it’s just the tax lien stuff and the sale of the home I don’t. My attorney wants 00 up front. It is so embarrassing – I used to make K per week – and now I’m reduced to not being able to pay an attorney. Life goes on.
Dude…broke or not you need an attorney on this.
May 6th, 2010 at 8:18 amI can’t answer most of your specific questions . . . but I can tell you (from personal experience of declaring bankruptcy about 12 years ago) that you are required to have an attorney to get your bankruptcy through the courts. They will not let you go through without one. There are just too many "things" you need to know.
When I did it, the attorney I used charged $650 . . . for the whole thing. Hopefully you can come up with that kind of money to get you through this . . .
Good luck!
May 6th, 2010 at 8:18 amChapter 7 provides for full discharge of allowable debts. Chapter 13 provides a payment plan to repay some debts, with the remainder of debts discharged. Under the new bankruptcy laws, tax debts are treated the same way in both Chapter 7 and Chapter 13 petitions. Not all tax debts are capable of being discharged in bankruptcy. The bankruptcy petitioner must have tax debts that meet five criteria for discharge.
Tax debts are associated with a particular tax return and tax year. The bankruptcy law lays out specific criteria for how old a tax debt should be.
Five Rules to Discharge Tax Debts
If the income tax debt meets all five of these rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions.
1. The due date for filing a tax return is at least three years ago.
2. The tax return was filed at least two years ago.
3. The tax assessment is at least 240 days old.
4. The tax return was not fraudulent.
5. The taxpayer is not guilty of tax evasion.
Return Due At Least Three Years Ago
The tax debt must be related to a tax return that was due at least three years before the taxpayer files for bankruptcy.
Return Filed At Least Two Years Ago
The tax debt must be related to a tax return that was filed at least two years before the taxpayer files for bankruptcy. The time is measured from the date the taxpayer actually filed the return.
Tax Assessment At Least 240 Days Old
The IRS must assess the tax at least 240 days before the taxpayer files for bankruptcy. The IRS assessment may arise from a self-reported balance due, an IRS final determination in an audit, or an IRS proposed assessment which has become final.
Tax Return was Not Fraudulent
The tax return cannot be fraudulent or frivolous.
Taxpayer Not Guilty of Tax Evasion
The taxpayer cannot be guilty of any intentional act of evading the tax laws.
Some Tax Debts Not Dischargeable
Tax debts that arise from unfiled tax returns are not dischargeable. The IRS routinely assesses tax on unfiled returns. These tax liabilities cannot be discharged unless the taxpayer files a tax return for the year in question.
Other Tax Issues in Bankruptcy
Before a Chapter 7 or Chapter 13 bankruptcy can be granted, the bankruptcy petitioner is required to prove that the four previous tax returns have been filed with the IRS. The four previous tax returns must be filed no later than the date of the first creditors’ meeting in a bankruptcy case.
Additionally, bankruptcy petitioners are required to provide a copy of their most recent tax return to the bankruptcy court. Creditors can also request a copy of the tax return, and petitioners must provide a copy to them.
If it were me I would go see my local legal aid attorney or borrow money to pay the $1500 (remember this incudes filing fees which you will have to pay even if you don’t have a lawyer).
May 6th, 2010 at 8:18 amJust simply check on my page
May 6th, 2010 at 8:18 am