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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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are chapter t banctruptys done in federal or state courts?

Resolved Question:

are chapter t banctruptys done in federal or state courts?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 5 years ago.
Bankruptcy proceedings are within the exclusive jurisdiction of the federal bankruptcy courts. State courts cannot hear bankruptcy actions, pursuant to the U.S. Constitution, Art. 1, Sec. 8.

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Customer: replied 5 years ago.
ok- lastly- if I file for chapter 7 and one of the debts is to the Irs and there had been a criminal prosecution relevant to that- does that prevent it form going through?
Expert:  socrateaser replied 5 years ago.
A criminal fine for restitution is nondischargeable in bankruptcy. The original taxes owed, and any penalties and interest accrued on the tax are dischargeable.

However, taxes incured within three years of the date that the tax was original due, or 240 days after a separate tax is assessed, are also nondischargeable. So, with respect to federal taxes, as the old saying goes: "Timing is everything."

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Customer: replied 5 years ago.
So- the fact that there was a criminal prosecution itself has no bearing? In this case there was a DOJ -Fine/Judgement- which was not restitution to any person -organization-is that dischargable?
Expert:  socrateaser replied 5 years ago.
A criminal fine payable to the government is not dischargeable, except for a penalty on a tax liability. You seem to be suggesting that the federal court assessed a fine, which was not a tax penalty. If so, then the fine is not dischargeable in bankruptcy.

Hope this helps.


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