Free Initial Contract (919) 627-7748 If you are going to North Carolina Bankruptcy Court or need a North Carolina Bankruptcy Attorney then you need Cameron Law. Better in most cases then the touted "credit management", "debt reduction", "debt consolidation loans", "credit repair" and, "debt settlement"; It allows a fresh start and the ability to clean up your credit. Unlike a North Carolina Bankruptcy, none of the others help your credit, and most will damage it more.
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Yes, bankruptcy can get rid of or reduce interests and penalties in a cram-down Chapter 13. You can include taxes and student loans in a Chapter 13 repayment plan.
Filing under any of the reorganization provisions (Chapter 11, 12, or 13) can buy time and force a repayment plan on the IRS. Filing a petition under any Chapter, means that the IRS will no longer talk to you and negotiate. Reorganization Plans force the IRS to accept a payment plan for any kind of taxes. It is sometimes possible to reduce tax bills in a Chapter 12 or 13 plans, similar to an Offer in Compromise. However, a Chapter 13 must offer as much as the IRS would receive in a Chapter 7.
Taxes do not necessarily have to be paid in full, but this is up to the discretion of the bankruptcy judge. The debts and the plan to repay them can be "crammed down". In order to be discounted, the taxes must be:
a) income taxes; with
b) returns due more than three years before filing
c) assessed by the IRS at least 240 days ago.
To be crammed down, the IRS must not have recorded a valid lien or there is no property for that lien to attach. If you attempt to bankrupt taxes, the IRS will normally no longer negotiate; however, don't be afraid to litigate and file a Chapter 7 or 13 to discharge your taxes. The IRS only does this to psychologically discourage you from filing, and is an unfair tactic.
If a tax return was due less than three years ago, or the taxes were assessed less than 240 days ago, or the taxes are not income taxes (such as for payroll), they are "priority" taxes. Priority taxes and Chapter 11 taxes must be paid off in full through the plan. However, a Chapter 13 stops interest and penalties the moment it is filed. Under IRS Installment Agreements (IA), interest and penalties continue to run. So, paying $1,000 per month under an IA for a $60,000 tax bill leaves a balance of at least $30,000 after five years. The same payment in a Chapter 13 plan pays off the tax debt in full! Chapter 13 forces the repayment plan on the IRS. The IRS cannot get anything more than the bankruptcy judge approves. The IRS cannot restart collection activities or seizures of property or wages as long as a Chapter 13 plan is underway. This is a powerful way to get around an unreasonable Revenue Officer who won't agree to a fair IA. In most Chapter 13 plans, the monthly amount paid to the IRS is far less than IA proposals that the IRS rejects.
Tax interest penalties may be greatly reduced by the Court. Even fraud penalties, never dischargeable in Chapter 7, can be reduced in a Chapter 13.
Unfiled income taxes may be paid as a fraction on the dollar. Though actual filing of tax returns is a requirement to discharge taxes in a Chapter 7, there is no "2- Year Rule" in Chapter 13.
Tax Liens and the liability for the taxes are extinguished when a Chapter 13 is completed.
To qualify for Chapter 13, the Debtor only needs to have a steady stream of income. It need not be wages: Social Security, pension payments, and receipts of an independent contractor all qualify. Unsecured debts should be discharged in a Chapter 7, if it is possible, and the debts cannot exceed $1,250,000. If the debts are greater than that, a Chapter 11 may have to be filed. The Chapter 13 plan is submitted to the bankruptcy judge and the IRS rarely objects. The judge may make adjustments to the plan before approving it. Then monthly payments are made to the Court-appointed Trustee, who in turn pays the IRS.
*See contract for details
2004(c) -2010(c) Sheree Cameron, Esq. All Rights Reserved. Privacy Policy
Cameron Law is a Congressionally designated and Federally mandated Debt Relief Agency who's practice includes bankruptcy.
Disclaimer (the fine print): This web site is not legal advice, and it may not be applicable to your own personal situation. An attorney-client relationship is not established by reading or interacting with this web site.
Who is Attorney Sheree Cameron (Bar #31432)?
Sheree is Licensed in ALL the Districts (Eastern, Middle, and Western Districts) of North Carolina.
If you are going through hard times, you need Cameron Law. Better in most cases than the touted "credit management", "credit reduction", "debt consolidation loans", "credit repair", and "debt settlement"; North Carolina Bankruptcy allows a fresh start and the ability to clean up your credit.