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Can monies owed to the state of Maryland but not taxes be discharged in bankruptcy?
To be certain of the status of such debt you should check the state statutes if filing a state bankruptcy. If it is a Federal filing, debts owed to any state department or affiliate is only dischargeable in relation to the type of debt and when it was was incurred.
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Some debts, such as taxes (including payroll taxes, most student loans and unpaid wages) are not forgiven in bankruptcy even if you file, and will not be discharged even if yo…u are given bankruptcy relief of your other debts. And being in arrears in taxes may bar you from getting any bankruptcy relief at all . Talk to an attorney as soon as possible.
Yes, as a general rule. Taxes of all kinds are not discharged by the bankruptcy process. That means, when it's all over with bankruptcy, you still owe taxes to the f…ederal gorvernment, and any other government. In short, fiiling a petition in bankruptcy and a subsequent discharge will not get you out of paying taxes to the government. It's really easy to filing a petition in bankruptcy; it's very expensive not to do it right; the Bankruptcy Court is just not the same as your Magistrate's court, or the small-claim's court. It's very expensive to do it wrong and you cant do it but every so often (time limits: you just have to see the code. If you have a bankruptcy sitution you really need to see a lawyer who works with bankruptcy.
Yes they can! They will offset your federal return if you do not address any debts from that state.
Maryland's state sales tax is 6 percent
Chapter 7: This chapter of bankruptcy law provides for a full liquidation of an entity's non-exempt property to satisfy creditors, and discharges all dischargeable debts …This is a legal process under Federal statutes that provides for rehabilitation of a debtor through the discharge of certain debts or through a debt repayment plan over a certain period of time. Creditors cannot contact the debtor during the bankruptcy. They must wait until it is fully discharged. There are three chapters of bankruptcy Answer I can't give a definitive answer, but I can relate what I have seen. I suppose to get a definitive answer one would need to look at the Tax Code, and I stay as far away from that as possible. However, I have never had a client come back and say they had any negative tax implications as a result of discharged debt in bankruptcy. I know the IRS can normally pursue forgiven debt as income, but for some reason (either because the Tax Code doesn't permit them to or because they simply opt not to) the IRS has never pursued any of my clients for forgiven (discharged) debt in bankruptcy to my knowledge. I have had a couple of situations where mortgage companies sent tax statements to clients who surrendered real estate in bankruptcy, but so far we have managed to get those resolved without any negative tax consequences. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person. Answer While cancelled debt is typically includible under the Internal Revenue Code as gross income, there are certain exceptions: 1. Debt that is cancelled through a bankruptcy is NOT taxable as income, 2. Debt cancelled when you are insolvent is NOT taxable as income to the extent of your insolvency. Therefore, there are no tax implications and it does not have to be reported on the tax return. The creditors will send you a 1099-C for cancellation of debt, but they should also check the "bankruptcy" box. Make sure they do this. :)
Property taxes are not in your records so you dont have to worry about them, if your home goes to foreclosure and bank that owns the house will have to pay those taxes if thy …want to sell the home in the future, property taxes will be in the house records not yours ans The above is one opinion...likely not to be found any place else. Property taxes, while of record against the property you own, are the owner of the properties obligation. Taxes, including property taxes, are, like all debts and all assets, whether recorded somewhere or not, included in BK and as such will be handled as a pre-petition liability. They will be settled, albeit frequently paid in full because of their position in BK prorities, but also depending on the assets you have to settle other items. (BTW, if you were to maintain accounting records - say like a business, your property tax accrued liability would in fact be recorded there, like any other debt/payable). If your mortgage is in fact foreclosed, the taxes will not be part of the debt the bank or successful bidder needs to be concerned with as they will be settled by the bankruptcy estate.
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Qualified principal residence indebtedness: This is …the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income. Non-recourse loans: A non-recourse loan is a loan for which the lender's only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
After a bankruptcy order is made the official receiver becomes the receiver and manager of the bankrupt's estate. The estate is administered by a trustee in bankruptcy who may… be either a qualified insolvency practitioner or the official receiver. On his appointment the debtor's estate vests automatically in the trustee who is then responsible for the administration of the estate. The estate is made up of all of the bankrupt's assets and the bankrupt is usually automatically discharged after three years except in certain circumstances. Answer Exemptions under Federal law, which may change a little in State applications by the Federal BK Court you file in: Personal and Real Property:(1) Household: Up to $425.00 per item not to exceed a total of $8,625.00 (includes animals, appliances, books, crops, furnishings, household goods, clothing, musical instruments)(2) Jewelry: Up to $1,075.00(3) Vehicles: Up to $2,575.00(4) Work tools (implements, books and tools of trade): Up to $1,625.00(5) Health aides (wheelchair, etc.): Unlimited(6) Burial plot: Up to $16,500.00 (in lieu of real estate exemption)(7) Real estate (house, co-op or mobile home): Up to $16,150.00(8) Any property: Up to $8,075.00 of unused portion of real estate exemption Wages, Pensions, Recoveries and Benefits:(1) Wages: None(2) Wrongful death funds: Amount needed for support(3) Personal injury funds: Up to $16,500.00 (excluding that for pain and suffering or pecuniary loss)(4) Lost earnings payments: Unlimited amount(5) Retirement benefits: Amount needed for support(6) Alimony / child support: Amount needed for support(7) Unemployment compensation: Unlimited amount(8) Veterans benefits: Unlimited amount(9) Social security benefits: Unlimited amount(10) Public assistance: Unlimited amount(11) Crime victims compensation: Unlimited amount Insurance:(1) Disability: Unlimited amount(2) Unemployment benefits: Unlimited amount(3) Unmatured life insurance: Unlimited amount(4) Life insurance policy loan value, dividends or interest: Up to $8,625 (5) Life insurance proceeds: Amount needed for support If you're doing a Chapter 7 bankruptcy, you can't discharge: * Taxes and tax liens * Student loans * Domestic support obligations (child support and alimony) * Luxury goods over $500 purchased within 90 days of filing * Fines or penalties of government agencies * Cash advances of more than $750 taken within 70 days of filing * Fraudulent debts * Willful or malicious injury to another * Death or personal injury from the operation of a motor vehicle, aircraft or vessel while intoxicated * Condominium or cooperative association fees * Debts not listed on your schedules Debts arising from fraud or maliciousness are not automatically excepted from discharge. The creditor must make a request to the court to except these types of obligations; otherwise they will be discharged.
Do you mean how do you find out if you have an unpaid tax debt from a previous year? Call the IRS 1-800-829-1040 and ask. Then call your state tax agency and ask. Do you m…ean how to figure out whether you will owe any taxes this year (or another year for which you have not yet filed)? Fill out a tax form and see if there is a balance due at the end. If you don't know how, there are a lot of web sites that will fill out your taxes for free and only ask you to pay when you are done and it is time to file.
Also keep in mind that liens are not released until the liability is paid in full regardless of the amount was dissolved by the bankruptcy. If you file Offer In Compromis…e, then any equity you have in property will be your offer amount. Liens: Once these requirements are met, a lien is created for the amount of your tax debt. By filing notice of this lien, your creditors are publicly notified that we have a claim against all your property, including property you acquire after the lien is filed. This notice is used by courts to establish priority in certain situations, such as bankruptcy proceedings or sales of real estate. The lien attaches to all your property (such as your house or car) and to all your rights to property (such as your accounts receivable, if you are a business). Caution! Once a lien is filed, your credit rating may be harmed. You may not be able to get a loan to buy a house or a car, get a new credit card, or sign a lease. Therefore it is important that you work to resolve your tax liability as quickly as possible, before lien filing becomes necessary. Yes. But you are much better off to look at other options, including something oficially caled "an offer in compromise". Bankruptcy involves everything you owe and everything you own...not just tax. ANS The above are, well simply wrong: Once a BK is filed, by law, no offers in compromise can be considered. The IRS will not communicate with you about the debt or an offer in compromise any longer.....IT IS AGAINST THE LAW FOR THEM TO DO SO.....it is considered trying to collect a debt, all actions for which MUST be stopped upon a BK filing. The tax due becomes part of the BK and the IRS or other auhtorities, will file claims with the court and these debts will be handled as part of the BK, and are given a priority over many others.
Absolutely not. Even in the BKs with the highest powered of lawyers...and Corporations....the last things done before filing BK is pay the sales and withholding taxes! In …most all states or taxing jurisdictions, (with California being one large notable exception), these are not taxes on "you", but money the business collects from others (customers or employees) on behalf of the State. They are trust funds....they not only won't ever be discharged....they carry direct, pierce any corporate shield, to the officers and involved parties, responsibility. Better take care of them one way or another ASAP. In the few places they may be legally considered the responsibility of the vendor, they may be discharged in the BK, (as situational as anything else), and would be a priorty claim and even allowed an extended bar date for filing a proof of claim.
If items are reaffirmed in bankruptcy but the credit report shows a 0 balance and the items were discharged through bankruptcy do you still owe the creditors?
You always "owe" creditors after a bankruptcy, they just can't try and collect. If you reaffirmed the debt, you can be held liable. Reaffirmation means that you are (re)assum…ing liabilty for the debt. Ignore what the credit report says, check with the creditor. Not true. Bankruptcy discharge means that the debt no longer exists. Perhaps you are thinking of the defense of statutory limitation on collection? I agree with Nate. The Bankruptcy Code, in 11 USC 524, says:"(a) A discharge in a case under this title- (1) voids any judgment at any time obtained...(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor...."My interpretation is that the Code says the debts are uncollectable and void but does not say they cease to exist. If they ceased to exist, then the creditors could not write them off as bad debts on their own taxes, nor could credit reporting agencies continue to use the bad debts to influence the debtor's credit score (which they most certainly do), nor would the debts continue to appear on the debtor's creditor report at all (which they do). I agree with Nate that what the credit report says in irrelevant: if the debt is reaffirmed then the debtor owes it. If the amount of the debt is actually $0.00 then no problem, but what the contract between the debtor and the creditor says trumps anything the credit report says. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
This is an intriguing question considering that the IRS does consider forgiven debt to be income normally. However, I have never seen the IRS pursue any of my clients for inc…ome taxes due to forgiven debt in bankruptcy. I stay as far away from the Tax Code as possible, though the answer may lie in there.Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
Answer Maybe. It depends upon the amount of time that has elapsed between the BK discharge and the receiving of the tax refund. Generally any refund …that can be seized by the trustee must be pro-rated.
Under the current bankruptcy law, you have to follow the instructions on the judge's decree. You may come under a category that you owe nothing following the judge's ruling. Y…ou may not. Either read the ruling, get someone to read it to you, or go to the court and purchase a copy to replace the one you lost.