Expert: Terry Leeders - 1/8/2009

Question
I owe to NY state tax about 17K and to the Federal Goverment about 52K.  NY state is confiscating money from my payrroll (10%) and I have a $900 a month payment plan with the IRS. I am making about 100K a year and do have many expenses that I can prove (rent, car, 4 dependents, etc). I also have a small student loan for me and one for my wife in default.  If I go to chapter 13 may be able to stablish a 5 year or more payment plan for the taxes? (In order to pay less for month)  Is that too dificult? Do that takes away the leans that the goverment got against me?  It is true that after making 12 consecutive payments I can even get an FHA loan?  How bad is life under bankrupt and after? If my income goes lower during the bankrupt do the payment get adjusted?

Thank you

Answer
With a chapter 13, your plan can run from 3-5 years based on how much disposable monthly income you have (it's a specific test looking at the last 6 months of income).
Once the tax debt is paid, they will release the tax liens.
You can apply for credit during the case (subject to court approval for reasonable and necessary) and you should have plenty of credit options available after bankruptcy the first month after discharge.
YOu can petition the court to change the payment (if the case allows) based on a change of circumstances, yes.