Taxes and Bankruptcy
Most potential bankruptcy petitioners automatically assume that taxes are not dischargeable in bankruptcy. When this conclusion is reached, the thought is why even bother? The fact is that some taxes are dischargeable in bankruptcy, and even if they are not dischargeable, there are several other tax debt options.
Chapter 7 Bankruptcy and Taxes
To begin, taxe debt can be discharged outright in a chapter 7 as long as it meets certain criteria. Some of the requirements are that the tax debt must be at least 3 years old. The tax return for the tax debt must have been filed with the last 2 years before filing the bankruptcy petition. The petitioner must not have not been audited or assessed for the tax debt within a certain period of time. So you see, some old tax debts can be wiped clean.
Chapter 13 Bankruptcy and Taxes
Chapter 13 is an excellent solution for tax debt. If the tax debt meets the criteria above, it can be discharged. If the tax debt is not dischargeable, or even a portion of the tax debt is not dischargeable, chapter 13 is an excellent way to pay the tax debt off at 0% interest. If you have old tax debt, talk to a qualified bankruptcy lawyer soon. As long as the tax debt is being ignored, penalties and interest will continue to accumulate. Interest will be capitalized. Filing a bankruptcy case will stop penalties and interest immedaitely.
Rememeber, even with taxes, there is a bankruptcy solution. Ignoring the problem will wind up costing you more money due to penalties and interest. Get out in front of the problem today. Call us now for a free consultation: 480-355-1377
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