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Tax Dischargeability Tolling with prior Chapter 13s
Dear Steven,
The tolling only affects the 240-day rule. It does not affect the 3-year or 2-year rules.
Subsection 507(a)(8)(A)(ii)(II) has the following language: "any time during which a stay of proceedings against collections was in effect in a prior case under this title during that 240-day period, plus 90 days." Thus, once the automatic stay terminates, the 240-day clock resumes its ticking.
Subsection 362(c) provides:
Except as provided in subsections (d), (e), (f), and (h) of this section-
(1) the stay of an act against property of the estate under subsection (a) of this section continues until such property is no longer property of the estate;
(2) the stay of any other act under subsection (a) of this section continues until the earliest of-
(A) the time the case is closed;
(B) the time the case is dismissed; or
(C) if the case is a case under chapter 7 of this title concerning an individual or a case under chapter 9, 11, 12, or 13 of this title, the time a discharge is granted or denied.
Therefore, your three-month concern shouldn't be an issue.
Good luck.
Nick
Nicholas Gebelt
Nicholas Gebelt, Ph.D., J.D.
Attorney at Law
Certified Bankruptcy Law Specialist - State Bar of California Board of Legal Specialization
Commissioner, California State Bar's Bankruptcy Law Advisory Committee
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I have clients who have been in 2 separate Chapter 13 cases between September 2012 and June of this year.
They have substantial taxes going back many years.
I'm trying to determine the effect of tolling on some of these tax years. The general rule is that all the dischargeability rules are tolled while in bankruptcy plus 90 days.
I have 2 questions:
1. Does the tolling stop when the Debtors case is dismissed, or when it is ordered closed? There is a 3 month difference. It would seem to me the earlier date since 11 U.S.C. 362(c) makes it the earlier date, but I haven't read a treatise, or any case law.
2. Does the Tax Determinator Service dependably calculate this-or is there a better service?
Thank you
Law Offices of Steven B. Lever
Steven B. Lever
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