If I have an accepted Offer in Compromise with the I.R.S., can I pay the balance due through a chapter 13 plan? I'm up for foreclosure!

According to a U.S. Bankruptcy Court in North Carolina, the answer is yes. In the case of In re: Mead, U.S. Bankruptcy Court, E.D.N.C. 2013, the Court ruled that the IRS cannot discriminate against people that file bankruptcy, that have an accepted offer in compromise and only need to pay the remaining payments.

The court said that it violates Section 525(a) of the Bankruptcy Code, which prohibits discrimination by a governmental unit against someone in bankruptcy.

If the amount that you still owe on an Offer in Compromise is an amount that you can manage to pay before filing bankruptcy, I would pay it before bankruptcy if you can. This is an unsettled area of law. But the IRS did not appeal this North Carolina decision, so it may be something that they are willing to accept in future cases.

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization