I’m considering filing Chapter 7 bankruptcy to discharge IRS debt. My wife and I file taxes jointly, but she hasn’t worked for 19 years. If I discharge the debt, can the IRS still pursue her for payment since she isn’t filing bankruptcy?
Yes, if you filed joint tax returns, the IRS could pursue your wife for the debt even if she doesn’t have an income. Joint filing makes both parties liable for the tax debt.
Drew said:
Yes, if you filed joint tax returns, the IRS could pursue your wife for the debt even if she doesn’t have an income. Joint filing makes both parties liable for the tax debt.
That’s right. In cases like this, it might make sense for both of you to file bankruptcy together to protect her from collection efforts.
Drew said:
Yes, if you filed joint tax returns, the IRS could pursue your wife for the debt even if she doesn’t have an income. Joint filing makes both parties liable for the tax debt.
You should definitely consult with a bankruptcy attorney to explore your options. Joint filing might be the best path to resolve this completely.
If your wife has no income and no assets in her name, the IRS might not have much to go after. But technically, they can still try to collect from her as long as the debt exists.
Axelle said:
If your wife has no income and no assets in her name, the IRS might not have much to go after. But technically, they can still try to collect from her as long as the debt exists.
Exactly. They could place liens or garnish assets in her name if she acquires any in the future, so it’s better to address this now.
Not all tax debts are dischargeable in bankruptcy. Make sure the debt meets the requirements for discharge before proceeding with Chapter 7.
Ren said:
Not all tax debts are dischargeable in bankruptcy. Make sure the debt meets the requirements for discharge before proceeding with Chapter 7.
Good point. Tax debts must meet specific criteria, like being older than three years, to qualify for discharge. A tax attorney can clarify this.
If the IRS debt is significant, having your wife file bankruptcy with you might make the most sense. It could protect her from future collection efforts.
You should consult both a bankruptcy attorney and a tax attorney to understand how this will impact your wife. The IRS is aggressive about collecting joint debts.
Kim said:
You should consult both a bankruptcy attorney and a tax attorney to understand how this will impact your wife. The IRS is aggressive about collecting joint debts.
Agreed. A tax attorney could also help negotiate a settlement or payment plan if full discharge isn’t possible.