Credit card debt, medical bills and mortgage debt are not the only types of debt that push many people to the brink of bankruptcy. In fact, these types of debt can all be discharged in Chapter 7 bankruptcy or reorganized and usually greatly reduced in Chapter 13 bankruptcy.
On the other hand, certain types of debt are considered "priority" debts that cannot be discharged. They will survive bankruptcy. Student loans, back child support and most tax debts are all included in this category.
That is the bad news if you are struggling with tax debt and are considering bankruptcy.
Chapter 13 Bankruptcy Can Help Resolve Unpaid Tax Debts
The good news, however, is that many debtors have been able to cope with unpaid income tax burdens through Chapter 13 bankruptcy. As long as the tax debt is more than three years old and you filed tax returns, you may repay back taxes (with no interest or penalties) over a three- to five-year period as part of the total debt reorganization plan that is characteristic of Chapter 13 bankruptcy.
Talk to an Attorney and an Accountant For Comprehensive Advice
How about an IRS workout as a solution? Many debtors owing back income taxes have found relief through IRS workouts. However, the rules have changed and these are becoming more difficult to use as effective tax debt relief solutions. Genova & Malin's bankruptcy attorneys often encourage clients to discuss this issue with a trustworthy accountant. We maintain good referral relationships with high-quality accountants in and near Poughkeepsie in order to provide our clients with comprehensive advice and help in all areas of finance.
Can Bankruptcy Bring IRS Tax Debt Relief? Talk to an Attorney.
Our New York lawyers welcome the opportunity to discuss your particular concerns related to tax debt and bankruptcy, along with any other related concerns. In a free initial consultation, we can tell you what to expect if you file bankruptcy as we clear up misconceptions and dispel fears that you have about bankruptcy in general. Call or e-mail the law offices to schedule a free consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
