Chapter 13 bankruptcies might require you to do your taxes quickly

A reminder, if you are thinking about filing a Chapter 13 bankruptcy case. You might want to consider doing your 2010 taxes quickly, and not putting it off until April 15th, or heaven forbid, October.

One reason is that Chapter 13 plans have to pay priority claims in full. And the priority claim that is usually at the head of the line is your currently due taxes.

A Chapter 13 trustee may not be able to recommend that your plan be confirmed unless they are sure that your taxes are covered. And how can anyone be really sure how much tax is owed until the tax return is prepared?

So if you want that Chapter 13 plan to sail through the system, better get going on a trip to the tax man!

 

By Doug Beaton

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