Judge rules lawmaker filed bankruptcy in bad faith

On behalf of The Rollins Law Firm posted in Chapter 13 on Tuesday, December 11, 2012.

Mounting debt is a serious concern for many people. Interest and late fees keep adding up, leading some people to consider Chapter 13 bankruptcy. Our readers in Jackson, Mississippi, may be interested in this developing story about a lawmaker in another state who has filed his second Chapter 13 bankruptcy in 2012. The state representative is fighting with state government and the Internal Revenue Service about paying income taxes. He is also trying to stop foreclosure of his home.

In 1996, the man stopped filing state and federal tax returns. He filed a lawsuit claiming that federal incomes taxes were unconstitutional and lost. The IRS wants to foreclose on the lawmaker's residence. The foreclosure is part of an effort to collect more than half a million dollars in back taxes, interest and penalties. The home is currently held by a trust in the name of the man's daughter. Federal authorities called the home's transfer to a trust a fraudulent transaction.

The lawmaker filed for bankruptcy in May, two days before he was to appear at a deposition for the foreclosure case. The man filed for bankruptcy again in October in an attempt to stop the foreclosure. A judge said in November that the second bankruptcy was filed in bad faith and would not halt the foreclosure.

Filing for bankruptcy is a valid option for many people seeking to decrease or eliminate debt. However, filing for bankruptcy can be complicated, which is why it may be helpful for those considering bankruptcy to speak to an experienced attorney.

Source: The Spokesman-Review, "Hart grilled over bankruptcy filing," Scott Maben, Dec. 1, 2012

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