What happens if I allow my chapter 13 to default and make an offer with the IRS? 3 Answers as of December 12, 2011

Lots of cases are dismissed for non-payment. If you need to file another case within a year you will have to file a motion to have the automatic stay extend for more than 30 days. That will you require to explain why the first case was dismissed.

It is not fraud but if you want to dismiss your case then just do that since you have the right to dismiss your Chapter 13 case at any time. However, if the IRS does not accept your office, which is not so easy, then you might have to file another Chapter 13 case and might be disqualified for six months and the automatic stay might not apply for more than the first 30 days. This kind of ideas about strategy is for lawyers to handle and too dangerous for you to do without legal representation.

An offer to the IRS is based on certain considerations as to your assets (without regard to your exemptions claimed in bankruptcy) and your disposable income. It is not a matter of throwing a number at them and see if they accept. If you are in a Chapter 13, you had to have disposable income (the expense numbers you used in your Chapter 13 are derived from the IRS numbers used to calculate income) which would be used by the IRS to figure the income you could pay over the next four years as part of your offer amount. Further, you don't get the repayment time t pay an accepted offer as you do with a Chapter 13. Bottom line is I would find out exactly what you may have to pay in an offer and what the repayment amount and time is going to look like before you dump your Chapter 13 and find out later your should not have done that.