Bankruptcy and Tax Debt
For individuals who are burdened by back taxes, bankruptcy seems as if it could be a potential solution. However, it’s essential to keep in mind what is possible with tax debt and bankruptcy, and what isn’t.
When it comes to filing bankruptcy for taxes, many tax debts are not dischargeable. This includes whether you’re filing for either chapter 7 or chapter 13 bankruptcy. However, when the appropriate conditions are met, taxes actually can be discharged.
There are certain situations where tax debts can be discharged via chapter 7. Federal income tax that you owe must meet several criteria which may or may not apply to your particular circumstances. That’s why it’s so important to consult with an experienced bankruptcy and IRS tax lawyer before you make any decisions, ensuring that you’re fully informed and nothing has been missed which could provide you with a beneficial outcome.
While you won’t be able to get rid of owed taxes with chapter 13 though, you may able to reduce your monthly burden as part of your repayment plan. For instance, by filing chapter 13, you can repay taxes free of interest and penalties for as long as five years.
Further, filing for bankruptcy may provide you with additional relief in other ways as well.
Call our office at 301-977-4300 today to schedule a free consultation. We’ll begin discussing your case and can tell you more about how we may be able to help you find a solution as bankruptcy and tax relief attorney in Maryland.