I currently have $93,000 of credit debt, a $300,000 line of credit and a couple of judgments, can I include all of this in a chapter 7 or would I have to go chaper 13? I also owe the IRS about $300,000 in back owed taxes? Are taxes allowed to be p...
The answer is, it depends. Generaly speaking, reletively recent imcome tax obligations can not be discharged in bankruptcy, and reletivly "old" income tax obligations can be discharged. This area of the law is truly a minefield, and requries a comprehensive analysis by an attorney with experience with the discharge of income taxes in bankruptcy. The attorney must apply three seperate legal standards to each year for which you owe income taxes. If all three standards are met, then the taxes for the year in question are dischargeable. If not, they are non-dischargeable. This is not inexpensive, but, given the numbers you are speaking of here, is probably well worth it to take the first step and have the analysis done.
Los Angeles, CA
If one files for Ch. 7 prior to a judgement being filed against them, however they have listed that person(s) as a creditor, does the filing insulate them from possible judgement?
The best way to analyze nearly any bankruptcy-related legal question is to first determine how the matter is treated outside bankruptcy, and then to determine how, if at all, a bankruptcy filing changes things. In nearly all states, and certainly in California where most of my law practice is based, a judgment, without more, does not give the creditor any greater rights than a creditor without a judgment. A judgment does, however, give the creditor a "ticket" to enforce its judgment against the debtor’s assets. This can include filing an abstract of judgment against real property, levying on bank accounts, garnishing wages. The debtor can also be required to sit for a judgment debtor's examination, where he/she must answer all questions regarding the nature and location of assets that can be used to satisfy the judgment.
Determining whether or not to file bankruptcy requires the consideration of many factors, only one of which is the existence of a judgment. Enforcement activity by a judgment creditor, however, can disrupt a debtor's financial life enough that bankruptcy is nearly a necessity.
The filing of a bankruptcy, through the automatic stay, stops any further enforcement activity regarding a judgment. Judgments which have been recorded as a lien against real property, however, stay on the record as an involuntary lien. The filing of a bankruptcy, without more, has no effect on the lien. There is a special procedure in bankruptcy where the debtor may be able to “avoid" the lien. As you can see, none of this is simple, and requires a consultation with a qualified bankruptcy attorney with substantial experience in individual cases. Good luck.
David ReederSee question