After reviewing the exemptions, I have about $10,000 left of assets that I believe I cannot exempt under the 703 code. My question is can I pay the IRS $9000 and then file Chapter 7 (within 90 days) or will the bankruptcy court likely take the money back and give it to my other creditors? I read about preferences and the 90 day window.
I dont want to pay the IRS money and then have to pay it back again once my bankruptcy ends because the court took it away from them.The taxes are for this year (2014), I ran my taxes through my software and that is what it came out as
Yes, that could be a preference. You could come of course, wait 90 days after the payment. You seem to have substantial assets. You should confer with a lawyer.
You've done some homework but they'are always questions and issues.
Technically the payment is a preference, but if the tax debt would be a priority claim in your case or is a secured claim (because of a tax lien), the trustee wont care because he would end up giving the money back to the IRS.
Exemptions dont matter because you cannot exempt preference (even with wild cards).
You need to consult with a local bk attorney. You have several issue, based on what you have stated, that need further inquiry.
There are bankruptcy solutions to work around your situation and get the IRS paid without compromising your discharge. Yes, it's a preference but that doesn't necessarily mean the trustee will seek to recover the money from the IRS. You can accomplish your goals, but it's a tricky case requiring some planning. You should speak to a local bankruptcy attorney right away to get the process underway, and you are on the right track.
The payment you describe is technically not a preference unless the IRS receives more than it would have through your Chapter 7 case. See 11 USC Section 547(b)(5).
A Chapter 7 Trustee is most likely not going to challenge such a payment. However, there certainly is a risk that this could happen so you should consult with a bankruptcy attorney to review all of your assets, debts and exemptions, so that you receive professional pre-bankruptcy planning advice.
You really should have an attorney. There are things you can do with exemptions that will allow most people to keep more than they think. That said, I don't believe it's a preference and, even if so, the trustee's not going to demand $ from the IRS just to give it back. The trustee's duty is to maximize the recovery for your creditors, not minimize it so they can make a fee. If you weren't aware, recent taxes get paid off first in a bankruptcy and then your other creditors split the rest (in a nutshell).
Maybe. IRS is a priority creditor. Payment within 90 days of filing is a preference. Can be avoided by trustee. However, trustee not likely to avoid the payment on facts stated because trustee would have to pay IRS priority debt before paying lower priority creditors. Before filing, review all debts with BK counsel.
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