William Kunofsky

William Kunofsky

Friday, August 19, 2011

Filing Bankruptcy Too Soon

There is a serious risk when you file bankruptcy to stop tax levies. The bankruptcy filing may not discharge the tax debt in a Chapter 7 case. The filing may require payment in full of the priority tax claim (taxes typically less than three years old).
Waiting or taking alternative action may allow for the discharge  or conversion of the priority tax claim (pay tax in full plus interest to date of filing bk) to general unsecured(payment based upon ability).
Panic can cause you to make uninformed choices. Check out the requirements for discharge of tax debt and if you qualify prior to filing.  You will be glad you did.

Tuesday, August 16, 2011


I received a call from one of my long time clients today. I have been representing this business for close to a year with sales tax and IRS payroll tax problems. The conversation was very emotional. He said, "The comptroller just shut down my business, emptied my cash register, and froze my bank account.
He had skated on thin ice and now was in extreme trouble. The Comptroller wanted 50% of the tax debt in order to allow the business to reopen. A huge bond was also demanded. We are waiting to see if relatives can help.
This problem could have been avoided. I had recommended a Chapter 13 bankruptcy to reorganize the tax debt. My client felt that he could not recover from the filing of a bankruptcy. He was wrong.  The Comptroller would not have been able to demand the bond and could not close the business if the bankruptcy had been filed as recommended.
Think of bankruptcy as a tool needed to reach your goal of resolving the tax debt without losing your business. Listen to your attorney. His advice is based upon experience. Do not let your friends and relatives recite to you their war stories about their friend's bankruptcy. . They don't know the details. Act fast, the TAXMAN COMETH.