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Can Tax Debts Be Discharged in a Chapter 7 Bankruptcy? October 20, 2016

Dothan, Houston
Can Tax Debts Be Discharged in a Chapter 7 Bankruptcy?, Dothan, Alabama

Filing for a Chapter 7 bankruptcy can be an excellent way to reclaim your life from debt, eliminating most unsecured debt and providing the breathing room you need to regain control over your finances. According to bankruptcy attorneys at The Gil Law Firm in Dothan, AL, it can even discharge some unpaid tax obligations, although the requirements are more stringent than those for credit card or other debts.

Your tax debts can be eligible for discharge in a Chapter 7 Bankruptcy, as long as:

  • You Owe Income Tax: Only federal taxes on your income can be included in bankruptcy. Other types of taxes, including capital gains or property taxes, can't be eliminated, even if they otherwise meet the bankruptcy criteria.
  • chapter 7 bankruptcyYou Did Not Commit Tax Fraud: If you were caught trying to evade your tax responsibilities, whether by using an incorrect Social Security Number or failing to disclose income, you cannot discharge your back taxes in bankruptcy.
  • The Debt Is 3 Years Old: For discharge eligibility, your tax debts must be from at least three years before the date you filed. You must also have filed a return for that year, although some courts will allow you to petition for bankruptcy even if the IRS filed a late return on your behalf.

Determining whether your tax debts qualify for discharge under a Chapter 7 bankruptcy is a complex undertaking, made exponentially easier with an experienced attorney at your side. They will guide you through the process, help you understand the tax implications of filing, and avoid common mistakes that could substantially delay your petition.

The Gil Law Firm provides individualized attention to all of their clients, ensuring that everyone gets the most out of their bankruptcy filing. Visit their website to learn more about their reputation for excellence and broad array of services, or call (334) 673-0100 to discuss your debts with an experienced bankruptcy attorney today.

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