Will Bankruptcy Void The Taxes I Owe?

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Will Bankruptcy Void The Taxes I Owe?

You should think about several things seriously if you are going to file bankruptcy.
First and foremost you should do everything possible to save yourself as much money, trouble and time as you can. Take some time and discuss this with your bankruptcy lawyer, you may have to be forceful to accomplice this as they may want to come up with quick solutions to get your case in front of the judge and finalized.

Under chapters 7 and 13 your tax debt may be eligible to be wiped out. If you do file for bankruptcy this is one of five ways for you to get out of tax debt. Its not quite as simple as just filing bankruptcy; you also have to meet other requirements to be eligible. Before you actually decide to file you should insure your efforts would not be in vain by determining beforehand that you meet the requirements to get out of tax debt.

Once you are sure you meet the requirements its time to decide if you will file under chapter 7 or chapter 13. With chapter 7 you will be able to get your debt fully discharged up to the allowable limits. Chapter 13 will normally have a payment plan put in place and you will have to pay back a portion of the debt you incurred while the rest will discharged.

If you’re hoping to have your taxes taken care of when you file bankruptcy there are five criteria you have to meet.

1. You cannot be guilty of tax evasion.
2. The date the tax was due was at least 3 years ago
3. The tax return was filed at least 2 years ago
4. The tax assessment is at least 240 days old
5. The tax return cannot have been fraudulent

If you can meet all of the above chances are you can have the tax debt discharged when you file for bankruptcy.

Although bankruptcy may seem a great way to clear your debt there are consequences that come along with this decision. Your credit will plummet and it will take you years to rebuild your credit score. If your filing just to get your taxes discharged you might want to consider some other options. You can set up a payment plan with the IRS or visit one of the many sites that offer ways of getting out of debt without bankruptcy. Basically if there are other options, don’t file, but if you have no other option and you’ve been told bankruptcy is your best chance for starting over, then talk to your lawyer and decide if chapter 7 or chapter 13 is the right one for you.

Source: http://www.ArticlePros.com/author.php?Doug Sheridan
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    About the author

    Doug Sheridan is involved in many online ventures. He researches and writes articles on a variety of subjects to help people make wise, educated decisions

    http://finance.opertoonity.com
     
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