Tag Archives: Chapter 7

Who Gets Paid First in Bankruptcy?

Morris County Bankruptcy Attorney Describes the Process People who file bankruptcy often owe money to different entities as creditors. When many creditors are involved, how do they decide who gets reimbursed first as the debtor begins to pay off his or her debts? This question is at the heart of recent legal entanglements for Sonja Morgan, star of the reality show Real Housewives of New York. Currently, many of her creditors are attempting to take possession of her home as she fights to keep it. One of her creditors, Hannibal Inc., wants to liquidate all her assets, repossess her home and take its share of her debts before her other creditors do. Morgan says that she has her own plan in place to relieve her debts. A judge is currently reviewing her proposal, which argues that funds from selling her French home, and an expected payment from her ex-husband, can…
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What Happens To Back Taxes When Filing Bankruptcy?

Morris County Attorney Helping People Get Out of Debt Popular singer Dionne Warwick revealed in a recent bankruptcy filing that she owed nearly $10 million in back taxes. The New Jersey resident, singer of such classics as “Walk On By” and ”I Say a Little Prayer” filed a Chapter 7 bankruptcy petition, saying a little prayer that she would be able to walk on by her troubles with the IRS. In the filing, Warwick stated that she owed nearly $7 million to the Internal Revenue Service, and more than $3 million in state business taxes to California. Her rep stated although she has paid the taxes, the large outstanding sums are penalties and interest which accumulated over the years. What Kind of Taxes are Dischargeable in Bankruptcy? Income taxes are the only type of taxes that may be discharged. The tax must be unsecured to be discharged, meaning the IRS…
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