Tag Archive for: Income Taxes

The Dreaded Means Test in Chapter 7 Bankruptcy

The Means Test is the fierce hurdle Chapter 7 bankruptcy filers have to clear to avoid having the Court dismiss or convert their cases. The kernel of the means test is this: If a debtor’s income exceeds his expenses by a certain amount proportional to his total unsecured debt, then abuse will be found, or at least abuse will be presumed. Each of these are terms of art and have specific definitions in the bankruptcy world.

Are my income taxes dischargeable in a bankruptcy?

In only limited cases are taxes or tax penalties dischargeable in bankruptcy. The primary issue is timing and a separate analysis must be done for each year’s taxes, interest and penalties.