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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Hello I Need some serious help. I filled bankruptcy in 2010

Customer Question

Hello

I Need some serious help. I filled bankruptcy in 2010 chapter 13 i pay 250 a month on it for two more years. I was thinking about getting a home equity loan With this i put multiple homes in the bankruptcy. I just received a 1099C for 55,000.00 the in line 2 and line 7 is 37600.00 I called the bank and said they didnt check the line 6 in the bankruptcy. The bank told me they didnt because the discharge is not happened yet. Well obviously it isnt because i am still paying on it. Now I am really stressing because is the IRA going to look at this as income? Without the discharge yet what can i do. I filled bankruptcy to protect me on matters like this. The bank wont check on the bankruptcy until they have the discharge paperwork. I started doing my taxes and if i add this 55000.00 my taxes will be more than i can ever pay off in any kind of time.
I don't have the money to straight finish the payment on the bankruptcy and get a discharge although I wish i did. I am confused why is the IRS going to make me pay taxes on income that I never made and that i cannot afford. For God sakes i owe on my taxes this year is that not enough. Can I do a 892 form for insolvency. My lawyer no offense doesnt know crap. He did my bankruptcy and doesnt help me or care to bother me with the rest. He told me talk to an accountant the account told me to talk to him. He said all he know is that we filled. I really need a new lawyer. I feel like this is such as mess. I am very worried i don't want to cheat the IRS but at the same time i cannot go years and years into debt trying pay on debts for the rest of my life. I would like a straight answer so the IRS doesnt chop my head off for whatever I do.
Thank you ahead of time.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 2 years ago.

cfortunato :

Hi JACustomer,

cfortunato :

You do not have to include any 1099-C amount as income for your tax return if the debt was included in a Bankruptcy.

cfortunato :

There is no requirement that the Bankruptcy has already been discharged.

cfortunato :

However, there is a form you have to submit with your 1099-C form to indicate to the IRS that the debt was included in your Bankruptcy.

cfortunato :

Here is the form you have to submit:

Customer :

even if the bankruptcy has not been discharged?

Customer :

i dont see the form?

Customer :

Hello anyone there

cfortunato :

The requirement is that the Bankruptcy be filed before the tax return is filed.

cfortunato :

Here are part of the form instructions:

cfortunato :

Title 11 Case

A

title 11 case

is a case under title 11 of the United States Code

(relating to bankruptcy), but only if you are under the jurisdiction

of the court in the case and the discharge of indebtedness is

granted by the court or is under a plan approved by the court.

cfortunato :

So if you are in a Chapter 13 plan, that qualifies you to exclude the 1099-C amount from your income.

cfortunato :

The instructions are on page 3.

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