I live in Houston, TX and need to file bankruptcy. I own my own home and it is paid for in full (no mortgage, yes HOA fee). I do not have a car however I desperately need one. I also owe the IRS around 12k. This happened because, when my mother passed away, her IRA came to me. I had no idea/was never informed of withholding and because of my ignorance I am deeply in debt. I would like to know a) can I keep my house? b) should I attempt to purchase a car before or after filing and c) can my tax debt be included? Any advice is appreciated!
1 Answer from Attorneys
The house is exempt property so you can keep it. If the HOA has a lien on your house, they would be a secured creditor so you have to pay them. Generally debts to the IRS can't be discharged in bankruptcy. The IRS is a priority creditor. However there may be a hardship provision so you should ask about that. I believe the IRS must try to collect within 3 years.
Texas law also exempts one car per driver. If you make a purchase while you are insolvent or within 90 days of filing, you risk that purchase being declared a fraudulent transfer or a preference. You could lose the exemption.
If you have no other debt besides the IRS debt, and can make the payments, you might consider taking out a home equity loan to pay the IRS off.
On the other hand if you have a lot of unsecured debts, such as credit card debts, bankruptcy would make it easier to service the money you owe to the IRS.
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