jjgrady12 Posted March 31, 2012 Report Posted March 31, 2012 Hi all, well its been a while. I am currently getting divorced and spoke to an attorney. He stated that since the Divorce process is underway that I should wait until it is completed to file a Chapter 7. He said that my situation currently does not qual for a Ch7. I just know that after we split with my debt and child support payments of 350/wk, It'll be very hard to get by. So my question is, we have mutual debt of past fed taxes of 5k from 2007. Alll other debt is my name only. Im looking to just tell the courts in the div that ill take on all debt since she doesnt work, if they split it that would be great but, its mainly all in my name. Anyone else been in this situation that could maybe give feedback on this?Thanks!
willingtocope Posted March 31, 2012 Report Posted March 31, 2012 Unfortunately, whatever you agree to in divorce court is not binding on eiither tax court or civil court (where the CCs will sue).You will both wind up responsible for the taxes...although, if she's not working, she might be able to fight it off.If the rest of the debt is STRICTLY in your name, they may just come after you...but, if she had one of the cards with her name on it, they may try to collect from her if you file BK.Your attorney is probably right that after the divorce, you may qualify for a BK 7...but...it might not be over for her.
jq26 Posted March 31, 2012 Report Posted March 31, 2012 Assuming you timely filed the returns and no fraud or willful evasion was involved that gave rise to the federal tax owed from year 2007, the taxes should be dischargeable if you file the BK7 (11 USC 523(a)(1)). As willing said, the entire tax bill will then shift to your ex. Tax liability is joint and several when on a joint return. Regarding the other debt, if your spouse's name is on it, regardless of who is "allocated" the debt in divorce court, she remains liable if your liability is discharged.
jjgrady12 Posted March 31, 2012 Author Report Posted March 31, 2012 And in that case, the only thing thats in her name jointly with me is the Fed taxes. which in this case would discharge from me. What if any problems could I foresee POST divorce witht the IRS going after her then? She'd file a 7 also? Or innocent spouse rule?
jq26 Posted March 31, 2012 Report Posted March 31, 2012 Hard to say- details of the case unknown, but she could potentially file a Chapter 7 I suppose if it was worth it. Innocent spouse rule wouldn't impact you- at that point it would just prevent collection of some or all of the owed tax by the IRS from your ex. You have 0 liability either way.At first glance, don't see anything on the radar to be to concerned about.More on innocent spouse rule, if interested: Publication 971 (09/2011), Innocent Spouse Relief
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