|Katherine:||Hello, everyone, and thank you for joining us today on This Needs to be Said. We’re here with our friend, attorney Peter Daigle. He is going to talk with us about bankruptcy matters. Today’s story is about those who have been affected by taxes. Welcome back, Peter. I feel like it was so long since I’ve talked to you. Oh my God.|
|Peter Daigle:||Thanks, Katherine. Your kind remarks are always so nice.|
|Katherine:||I look forward to our talks. Let me talk about taxes and bankruptcies today and how that works. Give us a scenario when you’ve helped someone or some people in these situations.|
|Peter Daigle:||Sure. There are ways that bankruptcy can assist folks in both state and federal taxes. I’m going to discuss two ways specifically. One, if the tax is older than three, it’s old. That would mean right now if it was a tax, say 2012, 11, 10, 9, 8, and all the way back, those taxes could be discharged in bankruptcy. If you owed the federal government from a tax in 2012 and you file bankruptcy, you could discharge the obligation. Also, certain states, all states, you can discharge the debts also, but the requirements are that you have to have filed your tax returns on time for the states and generally the federal government, as long as you filed them, but as long as it has been filed for at least two years.
There are a couple of tricks to it, but essentially you will get rid of taxes that are older than three years if you follow a couple of guidelines. The second benefit to bankruptcy is if you do have some tax debt that is current or newer than the three years, the last three years, then you’re able to pay that text debt through bankruptcy, and you avoid any further penalties, and the interest rate drops to around 4%. If you’re currently paying the IRS 12%, let’s say, or whatever, because they’ve liened your house or they’ve done something else to you, then they’ll stop the penalties and interest, the high interest going on it.
A lot of times, the federal government will either garnish your bank account, levy your bank account, garnish your wages, or some type of collection activity. Certain states will also take your driver’s license or suspend any other license that you have. All those things that you may be concerned about lurking around in the shadows, so to speak, will not occur if you seek protection in bankruptcy, that they can no longer levy on you. They can’t intercept your tax refund. They can’t take your driver’s license. They can’t suspend your real estate license or whatever other license that you have. Those are some of the benefits.
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|Katherine:||All right. First of all, I want to back up to a conversation we had some sessions ago, because people may be wondering, can you really … I know we’re talking to an attorney. This is what he does. He’s an expert in this area. Can you really deal with the IRS in a bankruptcy? That sounds scary for me to even ask you that question, but you addressed this some conversations ago, so can we back up just a little bit and revisit that?|
|Peter Daigle:||Sure. The Internal Revenue Service or the State Revenue Office is really no different than any other creditor. Every creditor, whether it’s a former spouse or the IRS or MasterCard, they’re all subject to the laws of bankruptcy, which allows people to either discharge debt or earn their way out of their situation. If you have a considerable income, you may not be able to discharge the debt fully. You may have to pay some of it back or all of it back, but through bankruptcy you’re able to get on a payment plan based of what you can afford to make, and the penalties stop.
Then you’re also not getting the registered mail, and the levies, and all of the other things that come along with it. You’re able to work a plan through the bankruptcy court that you can live with and feel comfortable that it’s under control, and it’s not something that’s going to just wake you up one morning.
|Katherine:||Okay, because we get those letters, and people do, you get more than one letter from the IRS. They don’t just come after you, right?|
|Peter Daigle:||Right, right, but they can’t bother you if you’re in bankruptcy.|
|Katherine:||Let me be clear and make sure I understand what you’re telling me. We can put it in bankruptcy, but this is the repayment portion, or are we able to wipe that out completely?|
|Peter Daigle:||There’s two ways. If the debt’s older than three years, you can get rid of it.|
|Katherine:||Okay, so it’s gone.|
|Peter Daigle:||If it’s younger than three, if it’s three years or sooner, then you’ll have to pay it back, but you pay it back through the bankruptcy court. You make a payment each month through the bankruptcy trustee.|
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|Katherine:||Okay, so this person who’s having IRS trouble, is this the only thing that they’re going through or were they already filing bankruptcy?|
|Peter Daigle:||Everybody’s circumstances are different. Sometimes we see a collection of everything from back child support or alimony, and IRS, and credit card debt, and payday loans, and all kinds of stuff. Or sometimes it’s just taxes. Sometimes it’s just home mortgages. There’s no cases the same. Everybody’s different, but this is one debt that people are obviously afraid of because it’s the IRS, but they’re no different than any other creditor.|
|Katherine:||I have one more question. Where did it go? The first thing they can do, whether they’re already in bankruptcy or they’re having just this isolated concern that we’re talking about today, with the IRS and their taxes, they can give you a call and they can talk with you about it to even see if bankruptcy is the way they should go?|
|Peter Daigle:||Absolutely, of course.|
|Katherine:||What would you recommend as the first step? I guess that that would be the better question.|
|Peter Daigle:||The first thing you have to do is you have to really get your arms around the debt. What we would generally do, what an attorney would do, is get a power of attorney and speak to the IRS or the Department of Revenue and find out exactly what’s owed and what years, because it’s important to make sure that it’s done accurately. You can’t go necessarily off of what you believe or what even the notices say. You’ve really got to make sure that there’s nothing else out there that would have to be addressed at the same time. The first thing you’d want to do is give an attorney or an accountant the power of attorney to research exactly what is owed and what years.|
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|Katherine:||Okay, but picking up that phone and making a phone call, Peter, tell them how they can get in touch with you. Also, let them know that you have a free book for them to get a copy of as well.|
|Peter Daigle:||Yes, Katherine, okay. You can reach me at 508-771-7444 or at www.Daiglelawoffice.com. If you go to the website, you can order a free copy of the book that I’ve written, or you can call the number I’ve just given you and we can discuss it also. I’d be happy to do either.|
|Katherine:||Awesome. As always, we have fun with these topics. I hope that we are bringing ease to people as we have these conversations, because even as I was asking that IRS question, my tummy was turning. Our goal is to help expose that elephant in the room and help people live a better life and be more comfortable.|
|Peter Daigle:||That’s great.|
|Katherine:||Awesome. Thank you, Peter, for being a part of It Needs to be Said.|
|Peter Daigle:||Sure. Okay, Katherine. Talk to you soon.|
|Peter Daigle:||Okay, bye-bye.|