Discharging Income Taxes in Chapter 7 Bankruptcy

Throughout most of my 30+ year career, I have been interested in how a taxpayer can legally discharge federal and state income tax debts in a Chapter 7 Bankruptcy.  You may have been told that income taxes cannot be discharged in bankruptcy.  You may even have been told this by a lawyer.  I can assure you that this statement is not … Read More

The Truth About IRS Offer in Compromise Settlements—Cutting through the media hype

I’m sure that everyone reading this has heard on radio or seen on TV the advertisements in which the 1-800 tax settlement companies boast about getting very favorable IRS Offer in Compromise settlements for their clients.  I’m sure the statements are entirely true, but they are also misleading.  The 1-800 company suggests that since the smiling couple in the TV … Read More

Don’t Fall for Tax Protexter Lies

I’m writing this blog because I recently visited with a gentleman who wanted my favorable recommendation about an idea he had to avoid paying income taxes.  His idea was based on the notion that income taxes are unconstitutional.  I let the man rant for about thirty seconds before I shooed him away.  I just don’t have time or patience for … Read More

A Way to Deal with Non-Dischargeable Taxes

NEW IRS OFFER IN COMPROMISE RULES A WAY TO DEAL WITH NONDISCHARGEABLE TAXES In general, income taxes can be discharged in bankruptcy as long as more than three years have passed since the original due date of the return plus extensions, and the return signed and filed by the taxpayer has been on file for at least 2 years.  Bankruptcy … Read More


THE BANKRUPTCY MEANS TEST–A BRIEF OVERVIEW  If you have recently contemplated filing bankruptcy, you may know that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) requires that all debtors take a “means test” prior to filing bankruptcy.  So what is the means test, and what are the consequences if the debtor “passes” it or “fails” it.      What Is … Read More

Fifth Circuit Court of Appeals Rewrites The Bankruptcy Code

 Linda Trenett McCoy hadn’t filed her Mississippi income tax returns for 1993 through 2000.  By September of 2002, the Mississippi State Tax Commission (“MSTC”) had made no-file assessments (MSTC’s version of IRS’s SFR) for 1993 through 1997 and for the year 2000.  However, MSTC had not assessed tax against McCoy for 1998 or 1999.  On September 11, 2002, McCoy filed … Read More

Is My Retirement Money Protected?

Most retirement plans are protected in bankruptcy. The Supreme Court has ruled that retirement plans that qualify under a federal law called ERISA are not property of the estate for bankruptcy purposes. This means that the bankruptcy trustee has to leave these assets alone. Most retirement plans qualify under ERISA, and even if they don’t, they may be protected under … Read More

Can I File More Than Once? How Soon After a Previous Bankruptcy Case?

You can file a Chapter 7 bankruptcy every eight years. If it has been more than eight years since you have filed Chapter 7 bankruptcy, you are eligible to file for bankruptcy again. If it has been less than eight years since you filed a Chapter 7 bankruptcy which resulted in a discharge, you are still eligible to file a … Read More

Can I Protect My Cosigners?

A Chapter 7 bankruptcy releases you from your debts, but does not release your cosigners. Your creditors will demand payment from them if you don’t pay. Lenders want cosigners so that they will have someone else to pursue if you fail to make payments or discharge the debt in bankruptcy. One way to protect your cosigners is to continue to … Read More

Bankruptcy and Marriage or Divorce: Do We Both Have to File?

Do Both Husband and Wife Have to File? Even if you are married, your are not obligated by federal bankruptcy laws to file a joint case with your spouse. Married people can file a joint case, two separate cases, or one spouse can file for bankruptcy alone. However, if a husband and wife are both responsible for a debt and … Read More