Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy and Consumer Protection attorney here to assist you.
Did you already file your income tax return for 2012?
No, not yet...I expect to mail it tomorrow (the deadline).
Thanks for your response.
Should I file for an extensiuon instead?
You can have your 2012 tax debt discharged if you file a Chapter 7 after April 15, 2014.
If you apply for an Offer in Compromise (OIC), you would then have to wait an additional amount of time to reflect the period during which the OIC is being evaluated by the IRS.
This is because an OIC "tolls" the 2-year look back period for the discharge of income tax debt.
I'm behind in my credit cards by 3-4 months and will take me to court if I don't file chapter 7 soon.
Not sure I can wait until 2014
The other issue is if I get a job in the next year, my income will likely be higher than the income to qualify for filing chapter 7 in WA
Since you are not working (UI income is exempt [protected] from collection efforts), and unless you own valuable assets, there is really nothing your creditors can do to you if your wait 2 years to file.
If your income is too high to file a Chapter 7, you may want to consider filing a Chapter 13 instead. In any event, it would be best to apply for an OIC while you have no income - after your UI stops.
So...how long would I have to wait to file an OIC for 2012 taxes?
Until you stop receiving UI.
Actually, you do not have to wait until then, but having no income at all makes it easier to be approved for an OIC.
ok...if I file chapter 7 now and it takes 100 days to complete, that would be around the time my UI is no more and that would be the time to file the OIC...correct? (Since I believe you can't file an OIC until chapter 7 is complet?)
That is correct - you cannot apply for an OIC while you have a Bankruptcy case in progress.
ok...what would be a realistic OIC amount to offer that would be accepted? I understand the average is about 17% of what is owed.
I'll have no assets and no income around that time I suspect
except a 2002 Honda and my personal items (clothes, laptop, etc)
not sure how much cash...I have <10K in IRA left
How much will you be owing to IRS?
The general rule of thumb is the IRS wants as much as they can get - which would be all the money in your IRA account.
my financial situation was exacerbated by a 2 year divorce that's just being completed now...finally
I guess that means I should spend it now while I can LOL
I was thinking the same thing, but cannot recommend that to you.
I hear you ;)
last questions...so if no IRA's by then...what's a reasonable offer...15? and how long would I have to pay that?
The IRS will work with you. If you have no income and no assets, they can extend the payments for up to 5 years.
very good! Thanks for all your help! Much appreciated!