Dischargeable State Taxes in Bankruptcy
In a 1987 Chapter 7 filing the State of Maryland was notified by the Federally appointed trustee to file a claim against an individual for current state income taxes owed, money allocated, by the trustee, to this debt was never claimed by the State of MD at the time (per the trustee). 20 yrs later the State of MD declared they were not required to make a claim at the time of the bankruptcy (1987). Now they are making a claim to the debt and attemting to seize bank accounts with 'State' Circuit Court approval. What legal grounds do I have to argue the issue on appeal?
1 Answer from Attorneys
Re: Dischargeable State Taxes in Bankruptcy
There is no obligation to file a claim. If the state did not file, the debtor could have filed on their behalf. Failure to do that waives any right to argue that they somehow failed to avail themselves of that collection option.
As for the title, "dischargeable taxes," the taxes MAY have been dischargeable in 1987 if they were for 1982 or 1983 (depending on the bankruptcy filing date and any extensions on the taxes) or before. My guess is they were not discharged, as you refer to them as "current." If they were discharged, then the state cannot now try to collect, and the bankruptcy court can be called upon to enforce the discharge.
There may be other defenses, but it's not possible to say from your post. See a lawyer.
Related Questions & Answers
Equity in home If a client qualifies for a chapter 7 under means test income, but... Asked 8/21/07, 11:15 am in United States Maryland Bankruptcy Law