I filed my 2011 income taxes and was unable to pay the entire amount owed. I had fallen on hard times and paid what I could. I was short $50. To some people that's not much. But I have been unemployed for about 2 years and live off whatever odd jobs I can muster. Previously my business failed because of the bad economy. Last June I made the decision to file for bankruptcy to stop the malicious actions of my creditors. I was well aware that I owed the State of Illinois $50 which would not be discharged in the bankruptcy. The State sent me a letter adding another $1 for failure to pay. That was fine. After my bankruptcy filing I began to get my finances in order and paid the tax bill. The tax and penalty was paid about 75 days late. The following day I got a letter in the mail increasing the penalty an additional $34. That's an additional 68% penalty! For being 2- 1/2 months late. Thts an APR of over 300% for something I just paid!
Here's where the real problem starts. When a person files bankruptcy all creditors must cease all collection. This is called the automatic Stay of collections. This applies to everyone that the debtor owes. This stays in effect for most debts until the creditor files for relief from the stay or the bankruptcy is discharged or ends. Apparently the State of Illionois does not care about the law.
After I received the additional penalty notice I called the number on correspondence. I Initially was on hold for almost 1 hour. I explained the situation and informed the department of the situation. The person said they did not know what to do and refereed me to the bankruptcy department. The bankruptcy department looked up my filing and said they would get back to me. They never did. Now 5 months latter I received another letter saying I owed $34. I attempted to call only had to be on hold for more than 1 hour. Apparently if you are on hold after 5:00Pm your call will never be answered. After a few more days I got another letter saying that they were going to take it out of my federal tax return if I didn't pay. I Called again after going through the long drawn out menu, I got a busy signal. I called again after about 10 minutes my call was answered by a very rude gentleman who was not sympathetic and eventually hung up on me. The only thing I got out of that conversation was that the $34 penalty was a collection cost assessed. According to the states rules penalties and interest additions were supposed to be explained not just listed on a bill. Maybe its legal to charge a collection cost because it's listed in their rules. But morally its wrong to add big penalties on small amounts. Plus the State feels its above the law in adding additional penalties when a person is in bankruptcy. Its even worse they don't care to do anything about it. Someone needs to do something about the malicious behavior of the employees of this department.