Legal Question in Bankruptcy in Minnesota

My wife and I have been separated since September 2009. We were married 26 years and are still on good terms. My wife has always had an income of around $25,000 a year. I'm a contractor and made $24,000 in 2009 due to the economy. In 2008 I made $115,000. We owe back taxes of $25,000 which are being garnished from our wages. Our home has been foreclosed on and I need to be out in September. Our other debts aren't that much. We had a second mortgage with a balance of about $20,000 and other miscellaneous debts that total about $10,000. Our second mortgage company now wants to garnish our wages. I'm wondering what our plan of attack should be. It doesn't seem like $30,000 is worth filing bankruptcy but on the other hand I can only take home $359 a week because of the IRS garnishment. I did work out a possible pay arrangement with them for $420 a month. The problem now is if I make the agreement and the second mortgage company is garnishing, how do I pay the IRS and be able to live. It would be nice to see everything disappear but I don't know if that's the wise thing to do. My main concern right now is to stop the garnishment from the second mortgage company. Thanks.


Asked on 6/22/10, 2:23 pm

1 Answer from Attorneys
Dominique Navarro Larry B. Stevens & Associates

The benefits of bankruptcy in your case, depending on all of the underlying facts, are that a bankruptcy filing would prevent anyone from garnishing your wages and pursuing other collection methods, including the IRS. Depending on how and when your back-taxes originated, you may be able to discharge them in a Chapter 7 filing. Also, you could discharge the second mortgage in a chapter 7 case, along with any deficiency in the first mortgage after the sheriff's sale. So, your dischargeable debt may be in excess of $30,000.00; again, depending on the underlying facts. You are going to want to consult with an experienced bankruptcy attorney, at least to provide further information.

Read more
Answered on 6/23/10, 9:42 am


Related Questions & Answers

More Bankruptcy Law questions and answers in Minnesota