Can tax debt be discharged through bankruptcy?
Are you eligible for tax forgiveness for back taxes owed to the Internal Revenue Service (IRS)? Many people believe that tax debt cannot be discharged through bankruptcy, but that is false. Filing bankruptcy can result in back taxes, as well as interests and penalties, being discharged. Do you qualify for tax forgiveness? Our firm can help you determine your eligibility.
In order to discharge your tax debt, you must meet the following three distinctions:
- Your debt must be at least 3 years old
- Your debt must be assessed by the IRS at least 240 days prior to filing bankruptcy
- Your tax return related to the debt must have been on file for at least 2 years
Provided that these factors are in place, you may be eligible to file bankruptcy under Chapter 7, Chapter 11, and Chapter 13. In a Chapter 7 bankruptcy filing, an “automatic stay” is enacted which immediately stops creditor collection methods. Debt should be discharged about 90 days after the case is opened. Only after debts are discharged can the IRS pursue collection. During the interim, you can plan for repaying any debt that is not discharged. Chapter 13bankruptcy or “reorganization bankruptcy” gives you, the filer, the time you need to repay what you owe in smaller amounts. Some debts can be discharged through Chapter 13 as well.
Contact Moran Law to Speak with a Bankruptcy Lawyer Free of Charge
Speak with a bankruptcy attorney for Detroit, Flint, Ann Arbor, and Saginaw about the options suited to your situation. We can work with you find a way to help you resolve tax liens, wage levies, and even to remove existing tax liens. We’re here to guide you through this process. Schedule a free consultation to discuss the tax debt relief solutions available to you. We’ve helped tens of thousands of clients resolve their debt, and we’re ready to help you too.