Thank you for the clarification:
Because the amount of debt is due to a failed business previously making 350k(self employed consultant) now 92k (employee). Debt is unsecured. Only myself in the household and I make 92. Debt with IRS is being paid down but have about 25k with other creditors. I do not own a house and I am driving a 2004 car.
Question: I have a lot of debt and several judgements against me. I went to an attorney (bankruptcy) and was informed that I would have to file a Chapter 13. My question is I do not want to file bankruptcy. I wish to pay my creditors back but not leave myself with nothing per month. Is there a legal minimum I have to pay back my creditors or can I pay them what I can afford and still live?
Response: You do not have to file for bankruptcy protection
if you are able to negotiate reasonable settlement with your creditors. However, this is easier said than done and you may resort to bankruptcy regardless. If you do opt for bankruptcy, you can file for Chapter 7 instead of Chapter 13 even with your income of $92,000.00 because you have primarily non-consumer debts. So, you are not subject to the Means Test
. See Item Number I B of the Means Test Calculation. Under Chapter 7, which is a liquidation Chapter, you do not pay anything to any of your creditors with exception of taxes. However, under certain circumstances, you do not have to pay the taxes either—the taxes can be discharged as part of your Chapter 7.
Generally, taxes are not dischargeable in bankruptcy (taxes are not included). See 11 U.S.C. Sections 523(a)(1) and 1328(a)(2). However, in certain situations, taxes may be dischargeable. Generally, the taxes are dischargeable if all of the following conditions are met:
(1) The tax return was not fraudulent and filed on time or, if the return was filed late, it was filed more than two years before the bankruptcy;
(2) The tax is not a priority claim; and
(3) You did not willfully evade taxes.
A tax debt is a priority claim if the tax return was filed less than three years before the date of the bankruptcy petition
. The due date of the return is normally April 15th, but this date can vary: it can be April 16th, or 17th if the 15th falls on a weekend. However, if the debtor obtained an extension, the due date would be the extended deadline.
A tax debt also is a priority debt if it was assessed within 240 days before the bankruptcy petition, or is assessable after the commencement of the case. Federal income tax is assessed on the date the IRS notifies the taxpayer of a tax claim or perhaps, on the earlier date that an assessment officer signs a summary record of assessment (Form 23-C).
Means Test Calculation form: