My husband lost his main job 5mo ago, now working only a part time job, severely reduced income. We owe IRS a large amount, credit cards, mortgage & auto payment. We were told by IRS the tax amount could be ''reduced'' by bankruptcy. We were told our 401k could be protected. Due to our age we need the protection. We were told we need to have a repayment plan with us when we see an Atty. With no funds for financial advise, and don't know what will be required for IRS, we are confused on how to do this. Do we have to use the 401k, could part of it pay the vehicle or refinance the home? Is there a place for free financial/bankruptcy council before fileing?
1 Answer from Attorneys
1. Never ever speak to the IRS!!
2. Your 401k is exempt
3. Payroll taxes are never dischargable
4. Income taxes are dischargable if more than 3 years old (if filed on time) or more than 2 years old (if filed late) So, some of your income taxes maybe dischargable and some might not be.
5. Income taxes more than 10 years old are out of statute and not collectible in any circumstance. Note: That hasn't stopped the IRS from trying to collect them in the past.
6. Your vehicles should be fine as long as you continue to keep paying on them.
7. Your home depends on how much its currently worth and your current mortgage balance. If you owe about what its worth we can probably get you into a Chapter 7. If you have equity in the home you will have to file a Chapter 13.
8. Legal services does provide limited pro bono legal services for the indigent. However, their income requirements are quite low and waiting periods are high.
9. I, like most bankruptcy attorneys in the area do provide payment programs on an installment basis. Where you can pay us a small amount up front and pay us the rest as we prepare your petition.
Hope this helps
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