Expert: Terry Leeders - 11/10/2008

Question
I owe the IRS about $50,000 and I also owe New York State about $18,000.  I do have student loans and some other small debt.  My income is about $130,000 a year and I do have 4 dependents.   How difficult is to get into bankcrupt in this scenario?  How bad could be for me and my family?  I know that even under banckrupt i have to pay the back taxes but How could banckrupt help in this situation?  Do getting into banckrupt make me a bad father/person?

Thank you

Answer
You will be subject to the means test calculation based on your local standards for living expenses.  Assuming you need to do chapter 13, income taxes are paid off thru the case.  Certain taxes may be paid at a discounted rate, so talk to your attorney to see if yours qualify.  The chapter 13 plan will pay back a portion of your debt over the next 5 years.  The court allows you to account for your monthly family living expenses.