Author Topic: IRS Payment Agreement and Chapter 13?  (Read 232 times)

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birchwood99

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IRS Payment Agreement and Chapter 13?
« on: November 29, 2017 03:54:26 PM »
Hey there.. My ex and I have a online\installment payment agreement with the IRS. I found out she is filing Chapter 13. I understand the IRS will be classified as priority debt and they will be paid first. It is likely the debt will be paid off via the trustee before her five year discharge. I am trying to understand what this all means for me. I know I will still be on the hook for any balance that could still be due after her discharge. But what about the is current payment agreement? Does it continue or does her filing Chapter 13 make it null and void? Assuming the IRS is all paid over the course of her Chapter 13, can she now come after me for my half? Perhaps the light at the end is I become free and clear as well at the end assuming no leftover balance!

Flyingifr

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Re: IRS Payment Agreement and Chapter 13?
« Reply #1 on: November 29, 2017 06:03:47 PM »
Hey there.. My ex and I have a online\installment payment agreement with the IRS. I found out she is filing Chapter 13. I understand the IRS will be classified as priority debt and they will be paid first. It is likely the debt will be paid off via the trustee before her five year discharge. I am trying to understand what this all means for me. I know I will still be on the hook for any balance that could still be due after her discharge.

The IRS debt is "Joint and Several" meaning both of you owe 100% of the debt. IRS doesn't care where the money comes from as long as it comes.

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But what about the is current payment agreement?

HER payment agreement is superseded by the BK13. Yours is not. If the payment agreement is b a joint payment agreement (as opposed to both of you having separate agreements) then IRS is happy. Once again, they don't care who pays it as long as it is paid. If the payment under the BK13 is less than the agreed payment in the IA (Installment Agreement) then the IRS will expect you to make up the difference.

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Does it continue or does her filing Chapter 13 make it null and void?

The Automatic Stay is just that - a stay of any future proceedings. It does not void the IA, it merely suspends it.

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Assuming the IRS is all paid over the course of her Chapter 13, can she now come after me for my half? Perhaps the light at the end is I become free and clear as well at the end assuming no leftover balance!

Depends on what the Divorce Agreement says. If it says each of you are responsible for half of the tax debt then she can come against you for anything that she paid over half.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

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birchwood99

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Re: IRS Payment Agreement and Chapter 13?
« Reply #2 on: November 29, 2017 06:18:36 PM »
Thanks... yes the decree listed the IRS debt to be split 50/50

Is it possible some of this debt could be discharged separately and not part of the CH13 payments since a good chunk is over three years old? But egain, even discharged on her side doesn't prevent me from being pursued. But I suspect the IRS has no reason to pursue me if the trustee is making payments to them. Such a mess!

I know the IRS debt will take priority over any other lender. This may be good or bad for me. Good if that means the IRS is paid off before end of five years. Bad for me because I would still be on the hook for any leftover balance on our joint tax debt even after she is free and clear. Maybe the trustee can figure out a way for her to pay her half and then I setup a new agreement or settle my balance in full at that time? Not sure. I have had no luck getting the IRS to split off the debt since we filed joint of course, but perhaps the trustee has more power here. 

For now, I plan to ask her to get more details from her lawyer and determine what the tax payments will be by the trustee and we go from there.

Flyingifr

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Re: IRS Payment Agreement and Chapter 13?
« Reply #3 on: November 29, 2017 09:14:23 PM »
Thanks... yes the decree listed the IRS debt to be split 50/50

Is it possible some of this debt could be discharged separately and not part of the CH13 payments since a good chunk is over three years old? But egain, even discharged on her side doesn't prevent me from being pursued. But I suspect the IRS has no reason to pursue me if the trustee is making payments to them. Such a mess!

Not possible. Having 2 people on the hook for the debt gives the IRS more collection leverage than having one person on the debt. IRS never releases anyone from responsibility for a debt unless there is some legal reason (Offer in Compromise, Innocent Spouse,. Injured Spouse and a Bankruptcy discharge naming the person as being discharged come to mind.) If she has a part of the debt discharged, whatever is left is your debt unless you also file bankruptcy.

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I know the IRS debt will take priority over any other lender. This may be good or bad for me. Good if that means the IRS is paid off before end of five years. Bad for me because I would still be on the hook for any leftover balance on our joint tax debt even after she is free and clear. Maybe the trustee can figure out a way for her to pay her half and then I setup a new agreement or settle my balance in full at that time? Not sure. I have had no luck getting the IRS to split off the debt since we filed joint of course, but perhaps the trustee has more power here.

I don't think you understand the role of a Bankruptcy Trustee. The Trustee represents the CREDITORS interests, not the debtors. The Trustee cannot exert any greater advocacy for you than you can, and probably will exert none.

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For now, I plan to ask her to get more details from her lawyer and determine what the tax payments will be by the trustee and we go from there.

That is your only course of action at this time. Gather more information.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

 

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