Tag Archives: taxes

Is My Social Security Overpayment Dischargeable in Bankruptcy?

Posted on January 18, 2012 | Leave a comment

Overpayments of Social Security benefits are unsecured debts just like credit cards and medical bills, and they are therefore dischargeable in Chapter 7 and Chapter 13 bankruptcy in most cases, short of any finding of fraudulence in the acceptance of the payment by the recipient. In other words, so long as you did not accept the payments knowing that you were not entitled to it—or knowing that you were about to file for bankruptcy—the overpayment amount can be discharged in a Chapter 7 or Chapter 13 bankruptcy.

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Posted in Chapter 13, Debt Listing, Social Security Overpayment, Tax debt, Tax Returns and Bankruptcy

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What Is Chapter 13 Bankruptcy?

Posted on January 5, 2012 | 2 Comments

Chapter 13 bankruptcy is a “reorganization” bankruptcy rather than a complete liquidation of debt as in a Chapter 7. A Chapter 13 is, basically, a payment plan enforced by the Federal Bankruptcy Court upon all of your creditors, whether the debt is a “dischargeable” debt like a credit card or “non-dischargeable” debt like a child support arrearage or recent income taxes owed. Contrary to popular belief, you are not required to pay back 100% of what you owe to your creditors in a Chapter 13. 

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Posted in Bankruptcy Process, Businesses in Bankrutpcy, Chapter 13, Home Mortgages and Bankruptcy, Income, Michigan, Property, Tax debt

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Getting a Refund in a Chapter 13: Will Your Trustee Let You Have It?

Posted on December 5, 2011 | Leave a comment

 Guest Post by Atlanta Bankruptcy Attorney Peter Bricks.

Many people use the tax return system as a pseudo savings account. They count on getting a federal and state refund every year and immediately use all the money to pay for all the necessary home upgrades, car repairs, medical bills, etc.. that they have been waiting to fund all year.

Put those same people as debtors in a Chapter 13 bankruptcy, and they should consider altering that strategy. For starters, depending on your district, your confirmed plan probably requires you to turn over your tax refund to your bankruptcy trustee.  That doesn’t necessarily mean the debtor will not get his/her refund, just that it’s no guarantee and might require a motion for the court’s approval to retain the tax refund. (Note that, in the Eastern District of Michigan, tax refunds ARE required to be turned over to Chapter 13 Trustees for the life of a Chapter 13 Plan. – JMH)

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Posted in Bankruptcy Process, Chapter 13, Michigan, Tax debt, Tax Returns and Bankruptcy

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Is Income Tax Debt Dischargeable in Bankruptcy?

Posted on August 9, 2011 | 3 Comments

Income tax debt is, under some circumstances, dischargeable in Chapter 7 bankruptcy. Even outside of those circumstances, it is at least “treatable” in a Chapter 13 bankruptcy in a manner that can be a much better deal for the taxpayer than any of the payment schemes offered by the IRS.

Income tax debt, whether Federal or state income tax debt, is, for starters, classified as a “priority” claim by the Bankruptcy Code. In a Chapter 7 bankruptcy context, that means that, unless the debt meets certain criteria, it is non-dischargeable and the bankruptcy will not affect the filing debtor’s obligation to pay it. In a Chapter 13 bankruptcy context, “priority” classification means that the debt must be paid in its entirety within the Chapter 13 bankruptcy payment plan (60 months maximum).

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Posted in Chapter 13, Chapter 7, Debt Listing, Tax debt, Tax Returns and Bankruptcy, Uncategorized

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