Julia
“Dear Steve,
After consulting with a bankruptcy attorney, I find I cannot afford to pay an attorney to file bankruptcy, so I’m going to file myself. In early March, I paid $4,000 to a credit card company to settle a $12,000 debt. He told me that money can be returned from that company on demand, and then paid to the IRS since taxes are a priority debt. How do I address that in the bankruptcy paperwork I file with the court?
I need to know how to list a debt I paid to a credit card company within the last 60 days so that the bankruptcy court or trustee demands those funds be returned to be paid on my IRS debt, which is a priority debt?
Having to pay a bankruptcy and resenting it is like being pissed off at the dentist for them filling a cavity. Some tasks are best left to professionals.
Julia”
Dear Julia,
I don’t know because this self-representation path is not one I would take in a bankruptcy. Bankruptcy filing errors can create a lot of problems. And while you do have to pay a bankruptcy attorney to represent you, what you are getting is their professional expertise, knowledge of how to best achieve the bankruptcy goal, and how to overcome and avoid potential problems. And apparently the bankruptcy lawyer you met with already knows how to do it. I think I know what the bankruptcy attorney was talking about but the clock is ticking on that and time-is-of-the-essence for you to file to recover it within the window of recovery.
The irony here is that if you have used part of the $4,000 to go bankrupt to begin with, this would not be an issue.
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I have been a consumer bankruptcy attorney for years. I work for a non-profit now and I no longer file cases, so I have no ax to grind. I can tell you absolutely that filing without an attorney experienced in bankruptcy is a bad idea. Not only can you end up losing property and being sanctioned by the court for failure to properly disclose things, but the transfer to the credit card company going to the IRS where you want it to go is not an automatic “slam dunk.”
Sometimes the trustee takes some convincing and if the trustee doesn’t want to do the work (because it’s a small amount to the trustee and he won’t get much)then your attorney can recover the transfer for you to get it to the IRS. (if you’d consulted with the attorney 60 days ago, he or she would have told you to pay the IRS and not the credit card). But okay, I understand, you have a problem now because time is short and you need to file before it runs out.
I would advise seeing if your income qualifies for a reduced rate through a legal aid service and if not, see if you can borrow the money from a friend or family member to pay the attorney. In many areas, attorneys are not allowed to collect fees after they file the case because then they would be one of your creditors and their debt would be wiped out by the filing (and it would create a conflict). Bottom line: represent yourself at your own risk.