Chapter 13 Adjustment of Debts of an Individual with Regular Income:
Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time. You are only eligible for Chapter 13 if your debts do not exceed certain dollar amounts set forth in the bankruptcy code.
Under Chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owe them using your future earnings. The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors. The court must approve your plan before it takes effect.
After completing the payments under your plan, your debts are generally discharged except for domestic support obligations, most student loans, certain taxes (detailed discussion with attorney), most criminal fines and restitution obligations, certain debts which are not properly listed in your bankruptcy papers, certain debts for acts that caused death or personal injury and certain long-term secured obligations.
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State and Federal Income Taxes
Withholding & FICA Taxes
The penalty assessed to individuals for failure to withhold from employee wages and pay to the Internal Revenue Service the individual withholding taxes, and FICA taxes, are penalties that are not discharged in bankruptcy. However, you may desire to repay the tax through a Chapter 13 reorganization, where applicable, to avoid seizures of assets and allow a more reasonable payment schedule. If there are no tax liens, or it the tax liens do not attach to equity in property, then this non-dischargeable tax may be repaid through a Chapter 13 without interest.
Personal liability for certain taxes may be discharged in bankruptcy, but the tax lien on the debtor's property may remain. There are different means of resolving tax liens, but generally the solution will involve paying the tax agency the value of the property subject to the tax lien.
THERE ARE BENEFITS AND DETRIMENTS TO ANY BANKRUPTCY, AND YOU SHOULD SEEK PROFESSIONAL COUNSELING BEFORE FILING A BANKRUPTCY. RALPH SCOTT BOWIE IS A BOARD-CERTIFIED CONSUMER BANKRUPTCY ATTORNEY AND A BOARD-CERTIFIED BUSINESS BANKRUPTCY ATTORNEY, CERTIFIED BY BOTH THE AMERICAN BOARD OF CERTIFICATION AND THE LOUISIANA BAR ASSOCIATION BOARD OF LEGAL SPECIALIZATION. WHEN YOU ARE CONSIDERING HIRING A BANKRUPTCY ATTORNEY, YOU HAVE A RIGHT TO KNOW WHICH ATTORNEYS HAVE MET THE STRINGENT STANDARDS FOR CERTIFICATION AS AN ATTORNEY. WHY SETTLE FOR ANYTHING LESS? CALL US IN SHREVEPORT AT 318-221-0600, OR IF YOU ARE OUT OF TOWN CALL US ON OUR TOLL FREE NUMBER 1-800-256-9470 FOR AN INITIAL FREE CONSULTATION TO DISCUSS OPTIONS IN BANKRUPTCY TO RESOLVE YOUR PROBLEMS.