The IRS has powerful enforcement tools at its disposal to collect on unpaid taxes, including the ability to seize bank accounts, garnish wages, and put liens on a property. If you owe taxes you can’t pay, a bankruptcy attorney may be able to secure relief, depending on a variety of factors, such as the type of debt. Below is an overview of how this option can help you get out from under the burden of mounting bills.
How Can Bankruptcy Eliminate Tax Debt?
If you can’t afford the IRS’s payment plan while keeping up with other bills, you may be able to eliminate the obligations with a chapter 7 bankruptcy. Even if your tax debts aren’t eligible for discharge, clearing additional burdens through bankruptcy may offer more resources to direct toward any back taxes. In some cases a chapter 13 case may be the way to discharge some of the tax debt.
Which Tax Debts Can Be Discharged?
Only unpaid income taxes can be discharged through bankruptcy, so even after filing you’ll still be responsible for any payroll, capital gains, or other items owed. Taxpayers who filed a fraudulent return or otherwise tried to deceive the IRS are also ineligible for such relief. Further, the tax debts must have been due at least three years before you filed for bankruptcy protection. Discharging tax debts is very complex and difficult, but bankruptcy may be an option. To discharge tax debts a case within the bankruptcy court would be filed against the IRS and a trial would need to take place.
How Can a Bankruptcy Attorney Help?
The bankruptcy code is complex, especially if you owe unpaid taxes. A good lawyer will review your finances, identify all dischargeable debts, and guide you through the process of preparing and submitting a petition. If you’re filing for a chapter 7, a bankruptcy attorney will also bring to light all available exemptions, ensuring you keep as much property as possible.
If you’re struggling with debts you can’t pay, the Law Offices of Frank E. Turney, P.A., will provide financial relief and detailed legal guidance to wipe the slate clean. These dedicated professionals have established a reputation throughout the Baltimore County, MD, area for giving each client the individualized attention these serious matters deserve. For a consultation with an accomplished bankruptcy attorney, visit the website or call (410) 788-8830 today.