Tackling Tax Debts In Bankruptcy Filings
It is not uncommon for debtors to fall behind on tax payments and even feel ashamed of their inability to pay. However, we understand that fitting payments into the budget is not always feasible and it is not something to be ashamed of.
At Marcus H. Herbert & Associates, our seasoned attorney has helped hundreds of clients resolve their tax obligations and achieve a debt-free future. Unfortunately, filing for bankruptcy does not always keep debt collectors at bay when it comes to recouping tax debts. Together, we will create a customized plan that addresses these debts and paves the way to a strong financial future.
Does A Bankruptcy Declaration Discharge My Tax Obligations?
Some tax debts can be discharged after filing for bankruptcy, but not all. A large part of it depends on the type of bankruptcy. With Chapter 7, you will generally owe tax debts to the IRS once the case ends. Examples of non-dischargable tax debts in Chapter 7 bankruptcy include liens, certain employment taxes, inaccurate tax refunds and recent property taxes. Under specific circumstances, federal income taxes can be discharged.
In contrast, you may be able to have a portion of your tax debts discharged under Chapter 13 bankruptcy or even discharged altogether. Tax debts incurred before a certain period may be discharged if they are nonpriority. Priority debts, on the other hand, are nondischargeable. Debtors who declare Chapter 13 bankruptcy have the option of settling these balances with payment plans.
In summary, whether your tax debt will be discharged depends on your specific circumstances. Our qualified legal team can assess your case to determine whether you can clear tax debts.
We Can Help You Take Back Control
We are proud to be a leading bankruptcy law firm serving residents of western Kentucky and southern Illinois. We welcome you to a free consultation where we will provide you with candid answers about your options to put tax debts in the past.