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Thursday, February 28, 2013

In my ongoing effort to explain in simple terms the various code sections in BAPCPA, I have put forth the text of 1305 and how post petition claims are handled.  A big question that I get is what if during my plan, I file my tax return, and owe?  As (a)(1) explains, a taxing authority, such as the IRS, can file a post petition claim, and have that claim be paid through the plan.  Good news for those that owe the IRS.

If you have any question, ask away.

Filing and Allowance of Post-Petition Claims in Chapter 13

11 U.S.C. § 1305
(a) A proof of claim may be filed by any entity that holds a claim against the debtor—
(1) for taxes that become payable to a governmental unit while the case is pending; or
(2) that is a consumer debt, that arises after the date of the order for relief under this
chapter, and that is for property or services necessary for the debtor’s performance under the plan.

(b) Except as provided in subsection (c) of this section, a claim filed under subsection (a) of this section
 shall be allowed or disallowed under section 502 of this title, but shall be determined as of the
 date such claim arises, and shall be allowed under section 502 (a), 502 (b), or 502 (c) of this title, or
 disallowed under section 502 (d) or 502 (e) of this title, the same as if such claim had
arisen before the date of the filing of the petition.

(c) A claim filed under subsection (a)(2) of this section shall be disallowed if the holder of such
 claim knew or should have known that prior approval by the trustee of the debtor’s
incurring the obligation was practicable and was not obtained.

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