Hi.

This is a question re: my parents. They owned a small business which was failing so they declared bankrupt last October and we thought everything was discharged but I found out yesterday that the California State Board of Equilization says they owe $20K of back sales taxes. They said it was an auditing assessment and it's NOT EXEMPT from bankruptcy. My parents have NO MONEY! They threatened to put liens on their account if we don't do anything about it. My husband and I are in a dilemma if we should take out our own personal loan to pay this down. But the issue is, their credit is already shot so having liens wouldn't make a difference right? My dad is 65 years of age getting $700 in social security benefits barely enough to survive an my moms not working.

We really don't know what to do. I'm so stressed as I have family of my own and I am barely surviving as is with this economy.

1.) Should we just handle this and pay it for them and be in the hole $20K? It doesn't even help their current situation, it only pays a debt so we're still in square 1.
2.) Should we let the liens occur after all, they declared bankruptcy have NO ASSETS AND LIVING UNDER MY YOUNGER BROTHERS ROOF.
3.) Are social security checking garnishable if they did put a lien on their checking account could they possible take this too??

Please help.
Thanks.

You should go back to the bankruptcy attorney, was this debt listed, and was it addressed by the court, and the attorney needs to contract them and advise you. That is what you were paying him for.

New Law Allows Garnishing Social Security Checks (http://www.consumeraffairs.com/news/ss_garnish.html)
It would depend on if they got the small business loan through the federal government and other factors.
Notify the bank that the social security is their only income so if they follow under the rules for not garnishing social security then you want to make sure that everything is done so the bank knows not to freeze the account allowing the garnishment.

They never got a small business loan through the federal government. Even back then they would never qualify.

The bankruptcy attorney wants $3000K more on fees to do an "offer in compromise" which has to do wit the state board of equilization to fill out paperwork for my parents.

This is an awful situation and I can't sleep at night.

Then they can not legally garnish their SSI as the article states, but you do have to notify the bank because they will do it any way.

Here are some more links Senators Say Banks Illegally Garnishing Funds of Senior Citizens, Veterans (http://seniorjournal.com/NEWS/SocialSecurity/2007/7-08-10-SenatorsSayBanks.htm)

Section 207 of the social security act:

None of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.


SOCIAL SECURITY DISABILITY SECRETS: SSD SSI TIPS ADVICE TO WIN BENEFITS WHEN YOU APPLY & APPEAL FOR SSDI (SSA LAWYERS, ADVOCATES) (http://www.disabilitysecrets.com/)

Thanks for the information.