Bankruptcy: Taxes, Divorce & Child Support

Man looking at the envelopes

What about tax debts?

Millions of Americans face huge tax debts. The IRS and the Georgia Department of Revenue are very aggressive in collecting money. Bankruptcy can offer a solution to some peoples' tax problems.

Tax debts, whether federal or state, that have been incurred within 3 years of the petition filing are not included in the discharge in a chapter 7 bankruptcy. The 3-year term begins from when the return was due or was filed, whichever is later. So, for years where a return was filed after April 15, the "clock" would start from the date the return was filed with the IRS. Additionally, if the IRS later audits or corrects the return, the "clock" restarts from the new notice date.

How about divorce debt?

Divorce can be very expensive. And the debts usually don't go away when the divorce is finalized. In fact, they can last for many, many years through alimony, child support and other payments.

Any debt that is owed to a spouse as a result of a divorce action is non-dischargeable in a chapter 7 bankruptcy. Therefore, while we are required to indicate a spouse on the petition as a creditor, the debt owed will not be included in the bankruptcy.

What about child support debt?

A lot of people fall behind in making court-ordered child support payments. Some people simply can't afford to make the payments, while others just don't want to pay.

Generally speaking, child support arrears are treated as priority claims in a chapter 13 bankruptcy. This means that they should be paid first as part of the repayment plan through the court.

Child support arrears are non-dischargeable in any chapter of bankruptcy. Therefore, if the payment plan does not cover the arrears due, he or she will still be required to cure the deficiency at the end of the case.

About Us

Why do so many people file bankruptcy? That's an easy answer! Because it eliminates debt and stops lawsuits and wage garnishments. It also stops harassing phone calls and letters.

We can help protect you. Having served as a Magistrate Judge, an Assistant Attorney General and as an Assistant County Attorney has provided us with tremendously valuable experience.

Here at the Sherman Law Group we welcome all questions and try to answer as many as possible on our blog. If you have a question, email it to us and we'll do our best to answer it (we might have to edit it for length). Of course, all questions are anonymous. Please call us at (678) 712-8561.

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