If I do an offer in compromise to avoid bankruptcy and cannot fulfill the agreement, can I then file bankruptcy afterward?

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If I do an offer in compromise to avoid bankruptcy and cannot fulfill the agreement, can I then file bankruptcy afterward?

I am at a crossroads with a failed business venture that I personally guaranteed. The bank that I owe the debt to has agreed to a offer in compromise and a deed in lieu of foreclosure (2 loans) to satisfy the loans. At this point I can afford this and want to avoid bankruptcy. However since these agreements come with monthly payments for 5 years I’m wondering if I get to a point down the road where I cannot afford the payments, can I then declare bankruptcy as a final option still?

Asked on October 13, 2011 under Bankruptcy Law, Wisconsin

Answers:

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 9 years ago | Contributor

Yes, you can file bankruptcy at any time (assuming you are otherwise eligible).

Be sure you analyze all the tax consequences of the deed in lieu before proceeding.  Bankruptcy can prevent any tax consequences from occurring upon sale of a property as long as (usually) the case is filed prior to the sale.  However, in most cases any taxes that are owed prior to filing the bankruptcy case are not dischargeable.  So it's important to analyze everything before you choose a path.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

bankruptcy blog: http://bklaw.com/bankruptcy-blog/

Follow Me on Twitter:  @bklawr

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 9 years ago | Contributor

Yes, you can file bankruptcy at any time (assuming you are otherwise eligible).

Be sure you analyze all the tax consequences of the deed in lieu before proceeding.  Bankruptcy can prevent any tax consequences from occurring upon sale of a property as long as (usually) the case is filed prior to the sale.  However, in most cases any taxes that are owed prior to filing the bankruptcy case are not dischargeable.  So it's important to analyze everything before you choose a path.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

bankruptcy blog: http://bklaw.com/bankruptcy-blog/

Follow Me on Twitter:  @bklawr


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