If you can’t afford your current IRS monthly payment plan, or are about to break it with a new year of taxes due, bankruptcy can save you.
It’s now after April 15 so it’s no longer tax season. But if you owe income taxes, it’s ALWAYS tax season. Here’s how to escape.
You may not think of bankruptcy as a solution to your tax problems. But do look into it before the tax collector starts grabbing at you.
Chapter 13 can prevent tax liens, which can be very detrimental. IF one IS recorded, Chapter 13 deals with it better than does Chapter 7.
Chapter 7 can prevent a tax lien. Here’s what happens with and without that recorded tax lien.
A tax lien recorded before you file bankruptcy can force you to pay taxes you could otherwise not pay. You can prevent that lien recording.
It’s much safer than under Chapter 7 because the protection lasts for years instead of just a few months, and is more flexible.
You get more control than with Chapter 7 over the amount of your tax payment, who you can pay ahead of taxes, & adjustments to the payments.
Resolving your tax debts through Chapter 13 “adjustment of debts” can cost you less than Chapter 7.
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.
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.”