2009 July | Kevin Gipsons Legal Tips

Law Offices of
Kevin K. Gipson
Attorney & Notary

Home

About Kevin K. Gipson

New Orleans Bankruptcy Blog

Myth No. 4: The IRS Will Audit Your Prior Tax Returns If You File For Bankruptcy.

July 28th, 2009

I am unsure how the myth came into existence that the IRS will audit prior tax returns if you file for bankruptcy.

This is simply just not true!

I have been in practice for 23 years and have never had a bankruptcy where the client had their tax returns audited.

So, how does the issue of your taxes come into play in a Bankruptcy?

Tax debts are considered to be Priority Debts. Depending upon how old the tax debt is, it will often have to be paid even if you file bankruptcy. There are circumstances where the tax debt can be discharged, but that is a topic for another day.
When you file for a bankruptcy, you must provide a copy of your most recent tax returns to the Trustee appointed to review your case. Also, depending upon local practice, two years of tax returns may be required.
In a Chapter 13 Bankruptcy, the debtor must have filed his tax returns for the four years leading up to the bankruptcy in order to get his Chapter 13 Plan confirmed. Also, depending upon local practice, the debtor may be required to verify in writing that he has filed his taxes.

The message here is don’t let rumors and misinformation keep you from filing for bankruptcy. Get the facts from an experienced bankruptcy attorney.

I do not charge for initial consultations.

Posted in Bankruptcy | No Comments »

Myth No. 3: Credit Card Debts Can No Longer Be Discharged In A Bankruptcy.

July 26th, 2009

One of the misconceptions some clients have is that credit card debts can no longer be discharged in a Bankruptcy.

This myth comes from changes in the Bankruptcy Code from when the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was enacted in October 2005.

As part of BAPCPA, a fairly small percentage of people filing for bankruptcy that could have filed a Chapter 7 bankruptcy and gotten rid of their credit card debt under the old law now had to pay some percentage of their credit card debt in a Chapter 13 bankruptcy.

For most people, BAPCPA made no change for them and they are still allowed to file a Chapter 7 bankruptcy and get rid of their credit card debt.

Posted in Bankruptcy | No Comments »

Myth No. 2: You Can Only File For Bankruptcy Once.

July 24th, 2009

You can only file for Bankruptcy once! This is not true.

However, there are limitations on how often you can file a bankruptcy.

If you have received a discharge in a Chapter 7 bankruptcy, you cannot file for a Chapter 7 bankruptcy again for 8 years.

You can file a Chapter 13 bankruptcy in less than 8 years from a Chapter 7 bankruptcy, however, if the Chapter 13 bankruptcy is filed within 4 years of the discharged Chapter 7 bankruptcy, you cannot receive a discharge in the Chapter 13 bankruptcy.

There are other limitations on the frequency of filing bankruptcy which may or may not apply to your particular facts and circumstances.

An experienced bankruptcy attorney can assist you in determining your rights under the Bankruptcy Code.

Posted in Bankruptcy, Uncategorized | No Comments »