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.
Bankruptcy DOES discharge–permanently write off–certain income taxes. It’s mostly just a matter of time.
Chapter 13 handles a tax lien on a home especially well when the home has enough equity to cover some but not all of the tax lien amount.
If you’ve decided to close down your business, or would if you could avoid its debts, or had a way to pay its taxes, consider bankruptcy.
You’re usually completely liable on jointly filed taxes, regardless of a divorce decree saying youâre not. But the IRS may give you relief.
You can usually keep your tax refund(s), although doing so may take some maneuvering.
In general, you must include every creditor in your bankruptcy documents. Most concerns you may have about this can be satisfied.
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.
If you owe income taxes, with wise timing you may be able to be in Chapter 13 for much less time.
If you owe income taxes, with the right timing you may be able to pay less taxes and pay no more into your Chapter 13 case.
If you owe income taxes, not only can you write off most older ones, you may have some control over which taxes you can write off.
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.
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