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Bankruptcy
Hi: I'm thinking in going in bankruptcy. I owed some money to the IRS. Do I still have to pay?
I have also some retirement accounts like my daugther custodian account for her college and a 401k. Are this accounts protected? Also my primary home and my car? Thank you. Carlos. |
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I might be wrong but I don't think by going bankrupt will eliminate the IRS debt, the daugh custodian acct ? -- not sure about that one, but the 401k should be protected, the house, is probably protected too, the car, I can't see how the bankruptcy court would take your one and only vehicle especially if you use it to get to and from work. Any bankruptcy attorney's want to answer. I am just an old guy with practical everyday experience.
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No you can not get rid of an IRS debt though bankruptcy.
You did not say how much you owed them, normally unless it is in the 1000's they don't come after your home ( yes they can put a lien on your home but normally this is a last thing they do) They also can garnish your pay check, attach all your bank accounts. There are attorneys who do nothing but work with settlements with the IRS. Normally unless you did tax fraud, but merely did not just pay the money you needed to. So if you owe in the 10,000 plus range they are a good idea. Normally they will just work out a payment plan with you. |
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Unless the new Bankruptcy law has changed the rules regarding this, I believe that Federal taxes can be discharged in a BK. There are fairly stringent rules though:1) A tax return must have been filed.2)The return must have been filed at least 3 years before BK,3) At least 2 years must pass before the BK petition if the return was filed late. 4)Taxpayer must wait min 240days from the tax assessment to allow time for collection. 5) Fraud must not be involved. A couple of years ago I had a friend who had over $50 K in Federal taxes discharged from when he was self employed. According to the article in front of me, dated 12/07/87 many attorneys are not aware of this.
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