Could Mr P pay back a little each month for the next say 15 years?
October 14, 2011
Mr Pierrotti filed for a Chapter 13 bankruptcy to keep from losing his home. He had missed a few mortgage payments and the home was going into foreclosure. His bank and the IRS both had a security interest in his home. He owed the IRS back taxes for quite a few years back and was hoping he would be able to pay it back a little at a time, for about 15 years. The United States 5th Circuit Court of Appeals turned him down. For one thing the longest a Chapter 13 could last is 5 years:
The sole issue before us on appeal is whether a proposed Chapter 13 plan may modify a secured claim for a tax deficiency into a long-term debt payable over a period longer than the Bankruptcy Code-mandated term of a Chapter 13 plan In his proposed Chapter 13 bankruptcy plan, Debtor-Appellant Carl Mitchell Pierrotti sought to “modify” the Internal Revenue Service’s secured claims for long-overdue tax deficiencies into a long-term debt payable over a period of fifteen years. We hold that he may not do so, because those tax deficiencies are not debts whose pre-bankruptcy payment terms include a final payment date that falls beyond the five-year term of Pierrotti’s Chapter 13 plan.
IN THE MATTER OF PIERROTTI, Court of Appeals, 5th Circuit 2011
PLEASE NOTE THAT THE PICTURE ABOUT CANCELING A SUBSCRIPTION TO THE I.R.S. IS MEANT TO BE HUMOROUS AND IS NOT LEGAL ADVICE. NOT TO MENTION IT IS NOT AT ALL POSSIBLE.