Priority debt is a debt entitled to priority in payment in a bankruptcy case. A general listing of priority debts is given in 11 U.S.C. section 507 of the Bankruptcy Code. Examples of priority debts are some taxes, wage claims of employees, debts related to goods and services provided to a debtor’s estate during the pendency of a bankruptcy case. In addition, alimony, maintenance or support of a spouse, former spouse, or child is considered a priority debt. If you have questions deciding which of your debts are entitled to priority status, you should consult an attorney.
11 U.S.C. section 523 lists exceptions to discharge. In general, all other debts not listed there are dischargeable. Some debts listed in 11 U.S.C. section 523, such as those based on fraudulent conduct, embezzlement or willful and malicious injury to another, may be discharged unless a Complaint to deny discharge of that debt is timely filed with the bankruptcy court. Ordinarily, these Complaints must be filed within sixty (60) days of the first date set for the meeting of creditors. Additionally, debts that were not listed on your bankruptcy schedules or that were incurred after you filed bankruptcy are generally not discharged. Denial of a discharge goes to the debtor’s entire proceeding, while determination of non-dischargeability goes to a particular debt only. A request for denial of discharge may be granted when the debtor has defrauded a creditor, concealed property of the estate, made a false oath, presented or used a false claim, refused to obey any lawful order of the court and other reasons contained in the Bankruptcy Code. A non-dischargeability of a debt excepts a particular debt from the discharge. This means that if the debt is determined to be non-dischargeable the debtor is still obligated to pay that creditor.
IF YOU HAVE FILED BANKRUPTCY IN THE LAST FIVE YEARS OR IF YOU FILE BANKRUPTCY WHILE WE ARE REPRESENTING YOU FOR YOUR ACCIDENT, YOU MUST NOTIFY OUR OFFICE IMMEDIATELY. OUR FIRM ALSO DOES WORKER'S COMPENSATION AND BANKRUPTCY.
1. MEDICAL BILLS - As stated above, the insurance company covering the vehicle which causes the accident is responsible for all reasonable and necessary medical expenses that are incurred as a result of an automobile accident. However, the insurance company is only going to make a one-time and one-time only settlement which would include all items of damage except property damage. They will not pay the medical bills as they become due.
Ken has practiced law since 1994 when he started working for Paul C. Parker and Associates. For over 20 years, his practice area have been Consumer Bankruptcy, Personal Injury and Worker’s Compensation. In 2007, Ken opened his own firm, continues to represent people in need of legal services. Ken also serves as a Judge of the Magistrate Court of Gwinnett County, Georgia.
Recently, I’ve had a couple of clients come in who are about to get married and who were considering filing a Chapter 7 bankruptcy. The question they asked is: “Should they file bankruptcy before they got married or wait until afterward”. In a lot of cases, it makes sense that a person would file a Chapter 7 before getting married.
Foreclosure
The Mortgage Forgiveness Debt Relief Act, which went into effect in 2007, is one way to avoid having to pay taxes on canceled debt relating to your principle residence but the act is set to expire at the end of 2012. If the ACT expires, it would spell D-I-S-A-S-T-E-R to homeowners facing foreclosure by hitting them with a double whammy!. Here’s why: Let’s say you are facing a foreclosure or you want to try to do a short-sale of your home. For this example, let’s say you bought the house for $200.000 and owe $180,000 but the market is down and it’s only worth $150,000.00. If the lender forecloses on the house or accepts the short-sale and the house sells for $150,000, there would be a deficiency of $30,000. The lender will generally issue you a 1099 indicating you received $30,000 in “imputed” income and the IRS will expect you to pay taxes on the imputed $30,000. So what’s the double whammy? Whammy #1 is you lose your house in a foreclosure and whammy #2 is you would have to pay taxes on income you never actually received because the bank issues you a 1099.