Photo by Nick Fewings on Unsplash. How you time your bankruptcy case filing can affect whether, or how much, you pay the accrued, or future, income tax interest and penalties. This blog post is in a series about the importance of smart timing of your bankruptcy filing. Today we cover how good bankruptcy timing can prevent you having to pay … Read More
Chapter 13 can save you money with both already accrued and ongoing income tax penalties and interest. So you pay less and finish faster. Last week we got into the advantages of paying priority income taxes through a Chapter 13 “adjustment of debts” case. Those are the usually-recent income taxes which cannot be written off (“discharged”) in bankruptcy. Today … Read More
What makes “priority” debts so special?
Chapter 7 sometimes doesn’t give much help with tax liens. But Chapter 13 hugely helps with tax liens already recorded, and stops new liens.
Once an income tax lien is recorded, Chapter 13 gives you a tool that may enable you to pay no more and yet get a release of that tax lien.
If the IRS or state has recorded a tax lien on your home, sometimes a Chapter 13 “adjustment of debts” can get rid of both the tax and the lien. Income Taxes that Can Be “Discharged” (Legally Written Off) If you owe an income tax debt, it can be discharged like most other debts. The tax debt just needs to meet … Read More
Having unpaid property taxes is dangerous, and violates the contract with your mortgage lender. Bankruptcy addresses both issues. Is Chapter 7 “Straight Bankruptcy” Enough Help? It possibly can give you enough of a fresh start with your other debts so that you can catch up on your property taxes. But doing so while keeping your mortgage lender also satisfied is difficult to pull … Read More
As of January 1, 2016 you can include any taxes you owe for the 2015 tax year in your Chapter 13 payment plan.
If you don’t have much equity in your home, so that a tax lien eats up all that equity and then some, how can you get rid of that tax lien?
If you owe more than 1 year of income taxes, some may be dischargeable and some may not. What happens if you owe both kinds?
Income tax debts that can’t be written off must be paid, either after a Chapter 7 case or during a Chapter 13 one.
A tax lien may attach to assets worth more than the amount of the underlying tax. That could make either a small or a huge difference.
A tax lien recorded against your home hurts even if the home has no equity. A Chapter 13 bankruptcy can often get rid of such tax liens.
Bankruptcy does not writes off newer income taxes, but Chapter 7 and Chapter 13 both still have ways of helping.
Chapter 7 and Chapter 13 can conquer your taxes, each in its own way. What could improve your life in 2015 more than getting rid of that worry?!