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Virginia Bankruptcy Lawyers Alexandria Chapter 7 Code Fauquier County Debtor Property Taxes

In re: DENISE ANN AIME, Debtor

Chapter 7

UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA, ALEXANDRIA DIVISION

January 7, 2010, Decided

On November 13, 2009–more than one year after her discharge–the debtor filed amended schedules that added the County as a creditor with respect to 2007 personal property taxes in the amount of $ 327.00.  With the amended schedules, she filed the motion that is presently before the court seeking return of those taxes, which she apparently paid on October 30, 2009, in order to remove a “hold” that had been placed by the County on her motor vehicle registration.

Issue:

Whether the claim arose prepetition or post-petition?
Whether the claim, even if it arose pre-petition, falls within one of the statutory exceptions to discharge?

Whether the claim arose prepetition or post-petition?

The Court held that “With respect to the 2007 personal property taxes, it is undisputed that liability for their payment arose as of January 1, 2007, and that the last day they could be paid without penalty was October 5, 2007. January 1, 2007, is before the date of the commencement of the case. 

Whether the claim, even if it arose pre-petition, falls within one of the statutory exceptions to discharge?

It was held that “even though the claim arise prepetition, But October 5, 2007–the last date for payment without a penalty–is “after one year before” the filing of the debtor’s bankruptcy petition.  The petition, as noted, was filed on August 31, 2007. One year before the filing of the petition was therefore August 31, 2006. October 5, 2007, is plainly after August 31, 2006.  Thus the tax, even though it constitutes a prepetition liability, is simply not discharged.”

The general rule that debts arising before the order for relief are discharged is subject to a number of exceptions, which are set forth in § 523(a)(1) through (19), Bankruptcy Code. Among the debts that are not discharged are certain taxes. § 523(a)(1), Bankruptcy Code.  These include, among others, taxes that are entitled to priority under § 507(a)(8), Bankruptcy Code. Relevant to the present motion, priority taxes include “a property tax incurred before the commencement of the case and last payable without penalty after one year before the filing of the petition.” § 507(a)(8)(B), Bankruptcy Code.

Disclaimer:

These summaries are provided by the SRIS Law Group.  They represent the firm’s unofficial views of the Justices’ opinions.  The original opinions should be consulted for their authoritative content.


About the Author:
The SRIS Law Group Virginia bankruptcy lawyers assist clients with Chapter 7 Bankruptcies in Virginia.  Our Virginia bankruptcy attorneys help clients decide if they need to file for a bankruptcy.  The SRIS Law Group has offices in Fairfax, Richmond, Virginia Beach, Lynchburg, Fredericksburg, Loudoun & Prince William.
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