Single income family with tax lein and joint charged-off debt

I have approximately $18k in a tax lein, I owe $12k to Oregon State in taxes, my wife and I also have joint charged-off debt to the tune of $55k.

I make $75k a year and my wife is a stay at home mom. We have two kids and another on the way.

I can’t go bankrupt because of my income, and I can’t even afford my tax lein payments. I have a high-interest loan for a used Honda Odyssey minivan that now needs a new transmission. My family is suffering and I don’t know what to do.

How can I manage my charged off debt and get rid of the tax debt without going hungry? I would go bankrupt in a heartbeat if I could.

A payback bankruptcy has too high of a payment – I can’t afford the $700/ month on top of rent, car, utilities and general cost of living. I’m going to have my wages garnished soon if I can’t figure out what to do.

Kevin

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4 thoughts on “Single income family with tax lein and joint charged-off debt”

  1. Hi Kevin,

    The median income to clear the chapter 7 test is roughly 72k for a household of 4 in OR. A skilled attorney may be able to assist in really digging for exemptions that apply to you in order to clear the means test hurdle.

    Also consider that with the new addition to the family you will then be a 5 person household and that 72k median will be increased to several thousand over your 75k income – which sounds like it will be a blessing.

    When is the new addition to the family expected?

    Reply
    • We’re expecting in early June.  Also, I recently spoke with a local bankruptcy attorney who said that my tax debt could potentially be charged off in the bankruptcy, but not until it has been two years since the taxes were filed – sometime after our baby is born.

      I also just discovered that the transmission in our minivan is going out.  I am on the verge of having my wages garnished, I cannot afford $2500 to pay for the repairs, and I don’t have the credit to get a loan to fix the vehicle.  I don’t know what to do.  We are going to be SOL and I fear I will lose my rental house and my job if I can’t pay my taxes.

      Reply
      • Kevin,
        Who is the threat of garnishment from? Is it a unsecured creditor or a tax issue?
        Have you sought any type of payment agreements on the tax debts?
        Are you working with a local tax professional on the issue?

        Do you have a friend or a family member who has an additional vehicle that they are willing to let you drive until you can workout your transportation concerns?
        Does your church, or other nearby faith based organization have a vehicle program available?

        The way you have brought a rental house into the discussion has me assuming some or all of your current tax issues are related to property tax. Can you outline in a reply all of the dynamics at play regarding the tax debts and the garnishment concerns?

        Reply
      • Kevin,
        Who is the threat of garnishment from? Is it a unsecured creditor or a tax issue?
        Have you sought any type of payment agreements on the tax debts?
        Are you working with a local tax professional on the issue?

        Do you have a friend or a family member who has an additional vehicle that they are willing to let you drive until you can workout your transportation concerns?
        Does your church, or other nearby faith based organization have a vehicle program available?

        The way you have brought a rental house into the discussion has me assuming some or all of your current tax issues are related to property tax. Can you outline in a reply all of the dynamics at play regarding the tax debts and the garnishment concerns?

        Reply

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