Q: My fiancé filed chapter 13 bankruptcy 2 years ago and due to losing his job and unable to find work due to COVID in Ma
March 2020 had to convert to chapter 7. Included in the chapter 13 was $15,000 of irs debt due to taxes on wages earned in 2015 and 2017, when the 13 was converted to chapter 7 we were told everything in the chapter 13 would be included in the chapter 7 he even has emails from the attorneys legal clerk indicating these taxes were included. The chapter 7 was approved and signed by the judge in May 2020, now 8 months later he received a notice from the irs indicating they intend to pursue garnishment of his wages for the $15000 debt. When he contacted the irs they indicated they received notice he is no longer in chapter 13 bankruptcy but did not receive notice of the chapter 7 discharge, when my fiancé attempted to contact the attorney to ask why the taxes were not included his law clerk called back and indicated the “type” of chapter 7 the attorney filed did not include the taxes and “sorry” there’s nothing they can do about that. We feel he did not do the job he was paid any advice?
A: It's because taxes are generally non dischargeable, meaning it survives the bankruptcy case. When a case is converted to chapter 7, the same debts remain in the case. The IRS not receiving notice of the discharge is irrelevant, because you could always send them a copy after (and this is sent out by the court, not the attorney). The law clerk might not have properly explained this to you. It's not the type of chapter 7, it's because your tax debt is likely non-dischargeable. In the chapter 13, you were going to pay it off in full anyway. In chapter 7, your other debts are discharged, except the taxeds. See 11 U.S. Code § 523. https://www.law.cornell.edu/uscode/text/11/523.
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