Bankr. E.D.N.C.: In re Marshall (Deceased)- Hardship Discharge, Death and Taxes

Summary: The Debtor died during her Chapter 13 case, still owing more that $165,000 in nondischargeable taxes to the IRS. Following the severance of her co-debtor/husband’s case, the Debtor’s attorney then filed a Motion for a Hardship Discharge pursuant to 11 U.S.C. § 1328(b). While stating that the death of a debtor can constitute a circumstance precluding completion of plan payments for which a debtor should not be held accountable. See In re Bond, 36 B.R. 49 (Bankr. E.D.N.C. 1984), the bankruptcy court here held that the evidence indicated the Debtor “deliberately avoided paying taxes on her income prior to filing the petition, an act of bad faith, which in the Court’s discretion, is undeserving of a hardship discharge.” For a copy of the opinion, please see: Marshall (Deceased)- Hardship Discharge, Death and Taxes.pdf