Expert: Terry Leeders - 9/30/2009

Question
if i file a chapt 13, discharging my non-priority cc debts & arrange a payment plan on delinquent income taxes, do penalties & interest continue to accrue on tax debt during the 3 or 5 yr plan?

Thank you

Answer
If the tax debt is more than three years old, they are discharged upon completion of the case.  If they are less than 3 years old, they will be paid 100% thru the case.  The interest may accrue in the background, but cannot be collected if the debt is discharged. if the case is dismissed, then the amounts will come due.