Resolving your tax debts through Chapter 13 “adjustment of debts” can cost you less than Chapter 7.
You may have assets not protected by the property exemptions. If you owe recent income taxes, surrender the assets so the taxes get paid.
What if you can’t write off all the income taxes you owe with a Chapter 7 case but can’t afford to pay those taxes in a Chapter 13 one?
With interest rates low, it doesn’t cost all that much to pay back taxes in monthly installments. File bankruptcy so you can afford to do so.
To forever discharge a tax debt, technically you must meet each of 4 conditions. But practically speaking, you meet 2 of them automatically.
Income taxes CAN be discharged under Chapter 7. Chapter 13 can be great with taxes BUT sometimes is neither necessary nor the best option.
Bankruptcy can do so much more than write off old taxes and buy time to pay newer ones. So if you owe lots of taxes, it’s worth considering.
You are protected from the very powerful collection capabilities of the IRS during bankruptcy virtually as if it were just any other creditor.
Don’t let what you’ve heard about “losing” your tax refunds be a factor in deciding whether to file a Chapter 13 “adjustment of debts.”
You can usually spend your anticipated tax refund on something important, but may first have to get permission from the bankruptcy judge.
You CAN lose your income tax refund if you file a “straight bankruptcy” Chapter 7 case. But you can usually keep it with the right advice.
No kind of bankruptcy will write off support debts. Chapter 7 straight bankruptcy won’t write off NON-support debts. Chapter 13 will.
Chapter 7 doesn’t stop a co-signed creditor from chasing your co-signer. Chapter 13 does. Now and forever.