If you owe taxes on more than one tax year, Chapter 7 may discharge the older year(s) so you can make low monthly payments on the rest
If you owe income taxes for 2013, filing a Chapter 13 “adjustment of debts” would enable you to pay that tax under very favorable terms.
If you owe a whole lot of income taxes, especially if you owe for multiple years, bankruptcy can get you tax debt free surprisingly fast.
Which is more powerful–tax collection or bankruptcy protection? Most of the time, bankruptcy is.
Even though a 3-to-5-year Chapter 13 case is often the best option for income tax debts, sometimes all you need is a simpler Chapter 7.
By following 5 steps, you can discharge (write off) more of the income taxes you now owe.
To avoid owing income taxes April 15 of NEXT year, file a partial-year tax return and pay the tax on it through your Chapter 13 case.
If you can’t discharge your income tax debt through Chapter 7, or make workable payment arrangements on your remaining tax debt, then Chapter 13 can be a good solution
Even if a straight bankruptcy would leave you owing some or all your income taxes, it may position you well to settle those taxes with an Offer in Compromise.
Don’t assume that just because your income taxes are too new to be written off that 1) bankruptcy can’t help, or 2) only Chapter 13 can help.
Here are the other three hurdles your tax debt has to jump over to be forever written of in bankruptcy
Your tax debt has to jump over 4 hurdles to be forever written off in bankruptcy. But if it does, that tax is history.
If you expect to owe 2012 income tax, you may be able to take care of it simply by paying less to your other creditors.
If you expect to owe 2012 income taxes, and you file bankruptcy after December 31, that tax can be “included” in your case.
If you owe income taxes, and are at the point that the IRS is about to seize your assets, you need to consider bankruptcy. It can help in surprising ways.
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