There Are Things You Might Not Know That You Can Do In A Bankruptcy
Video Transcribed: Oklahoma City Bankruptcy Attorney Edward Kelley 888 Debt Line, answering your bankruptcy questions, as always. Today we’re number four in our series on special powers of bankruptcy. We’re going to talk about getting rid of taxes. And the overall topic here is things you might not know that you can do in a bankruptcy. So whether in a 7 or 13, if you have tax debt that is over three years old, you can discharge it in that bankruptcy.
You might think, oh, taxes are, no way to discharge. That’s not true. Now bear in mind, that’s three years from the date that you filed them. So if you haven’t filed in 10 years and you think, oh well that’s 10 years ago, I’ll just file them now and they’ll be gone immediately. No, the IRS gets their crack at collecting it. But regardless of where you’re at in collections process, if your tax data is three years old, or more, from the date of filing, so for example, today’s February 21st, 2020.
If you filed them on February 20th, 2017, or earlier, can discharge them in full. Now in a chapter 7, generally, is going to mean it’s discharged entirely. In a chapter 13, then those debts will be treated like any other dischargeable unsecured debts and will be paid whatever percentage you propose. If you recall from previous videos, chapter 13 plan is based on what you can pay, not what you owe.
So usually, if you’ve got tax debt that old, you’ve got tax debt that is not dischargeable, filed less than three years ago, probably your plan’s going to take care of all that. So that’s a great way to manage your tax debt. Get rid of the portion that’s over three years old, get it down to the last three years, and then make that manageable. So be aware in a 7, the remainder that is not dischargeable is going to still be there.
When you file bankruptcy, it will probably interrupt any payment plan you have with the IRS, but you’re going to end up owing less total. And thus, your interest and penalties should be reduced, at least the interest. And you can concentrate on the rest of it. Now, this does not apply to student loans, or child support, or fines, or anything like this.
But taxes, three years or past, get rid of them. So that’s another special power in bankruptcy. Next video, we’re just going to do an overview of everything we talked about and go from there. So again, you can always reach me at 1888 Debt Line or Edward@wirthlawoffice.com, or on Facebook at our group called Oklahomans for Debt Relief.