Hi. I have an important question to ask about taxes. My brother has declared bankruptcy.?

Question

My brother has declared bankruptcy for the fourth time in 7 years, from buying to many luxuries. I have asked him if he has placed any money aside for taxes due for the year and he says he will not owe one cent since he has declared bankruptcy. Is this true or is he in denial? I have told him to prepare for an IRS audit. Any answers on this one would be truly appreciated.

A quick update on my brother and Bankruptcy... I finally got the truth from our Mother on his bankruptcy. He filed for debt relief and walked away from his home in 2006. Last bankruptcy was in 2000 with personal income a divorce and walking away from a lease to own. 1992 quit good paying job and turned home over to his bank for debts owed.1990 struck a deal with the owner of manufactured home he was leasing to take it back and walked away from the responsibility.
Mother is supporting them with $1,200 a month supplement to pay down bills at the present.

Answer 1

This is really sad to hear of people like this. Your mother shouldnt be helping them out or he will never learn...BUT that is none of my business. If you want answers that you know are for sure correct I would suggest you visit the website below. First consultation is free if you give them a call. You're a good sister.

Answer 2

From the experts:

It depends whether you file a Chapter 7 or a Chapter 13.

A Chapter 7 debtor can wipe out federal income taxes if all the following are met:

(1) the IRS had not filed a prior tax lien on the assets you own (if they have, the lien survives bankruptcy, which means that the government may still seize property to collect the discharged tax debts);

(2) you didn’t file fraudulently or try to evade paying your taxes;

(3) the taxes are more than three years old; and

(4) tax deficiencies that were assessed on prior returns were assessed at least 240 days prior to the filing of the bankruptcy.

In a Chapter 13 case, you’ll pay the IRS as part of your repayment plan. Not staying current on postpetition taxes, however, will put your plan at risk.

Prior to the Sec. 341 meeting of the creditors, you must file copies of your tax returns or transcript (including unfiled tax returns and any amendments while your case is open) with your case trustee, or any creditor who asks for it. If you do not, you risk an automatic dismissal of your case.

If a federal Notice of Tax Lien has been recorded before filing bankruptcy, it is highly recommended that you seek the advice of an experienced bankruptcy attorney as discharging taxes is far more complicated.

Answer 3

if he owes federal or state taxes, those are not wiped out in a bankruptcy. On a side note, I didn't think that legally you could file for bankruptcy 4 times in 7 years. I thought there was a period inbetween for when you could not file. Are we talking personal bankruptcy or business bankruptcy?

Answer 4

Chapter 7 bankruptcy can only be filed every 8 years. Chapter 13 is once every 4 years. Your brother is blowing smoke up your rear.

Answer 5

There are several things screwy here - one of which is I'm pretty sure you can't file bankrupcy four times in seven years if it actually goes through. Unless you're saying that the first three times he withdrew the petition or it wasn't approved or something, then it would be possible.

But bankrupcy doen't cancel out taxes owed, so if he's saying he won't owe anything because of the bankrupcy, he's wrong, or in denial.

Answer 6

Bankruptcy does not get you out of paying federal taxes. If he earned money this year, he will owe taxes.

Answer 7

well I don't know how he claimed bankrupcy 4 times in seven years, but that has nothing to do with taxes.