Barash & Everett LLC

Illinois Law Blog

Discharge of Government Indebtedness (taxes) in Chapter 12

Early in November, Washington passed Public Law 115-82 which significantly clarified the rights of farmers to reorganize through Chapter 12 of the Bankruptcy code without the fear of significant tax consequences.

Prior to this change, farming assets sold after filing bankruptcy but before discharge that created capital gains or other taxes would result in nondischargeable tax debt. This could be very expensive in instances where for an effective reorganization of debt significant assets need to be sold including heavy equipment, and land with low cost basis or that was fully depreciated. 

Guide to Being a LLC

When operating your small business as a Limited Liability Company, it is very important that you conduct business as the LLC legally. Proper procedures and practices will preserve your liability protection and make it difficult for savvy attorneys to bypass your LLC and sue you individually. Below is a guideline for you to follow to keep good practices as you do business as your LLC.

Calculating Spousal Maintenance under Illinois Law

In a dissolution of a long-term marriage where there is a difference in the spouses' income, it is possible that the higher earning spouse may be required to pay spousal maintenance, formerly known as alimony. Whether maintenance should be paid depends on a number of factors including the income and needs of the parties, realistic earning potential, duration of the marriage, the age, health and education of the parties, and the standard of living established during the marriage. Under an early version of the maintenance statute, once the court found that maintenance was appropriate, it had broad discretion in setting the amount and length of maintenance. It made it incredibly difficult for attorneys to predict maintenance outcomes for their clients. 

Discharging Income Taxes in Bankruptcy

Benjamin Franklin is attributed to have said in regard to permanency that "in this world nothing can be said to be certain, except death and taxes". Now little can be done about death, but taxes may not be as permanent as you think. There is a common misconception amongst Bankruptcy clients that income taxes cannot be discharged through bankruptcy. Often times this fear presents itself when someone operates a small business that fails leaving significant tax debt. Years later they are still trying to make payments or have turned to one of those fly by night tax helplines you see advertised in the middle of the night on television. It would seem that the tax debt disrupts sleep, because the commercials seem to be exclusively in the middle of the night. Well stop pacing your halls and get some sleep because relief through the bankruptcy process is available in certain circumstances for debt owed the government for taxes.

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