Everyone is theoretically susceptible to tax dilemmas, but when you really get in over your head, arriving at an alternate solution is key. Many people don’t know that bankruptcy is often the answer to tax woes and debt consolidation. The attorneys at The Gil Law Firm have helped countless clients file for bankruptcy, work out its complexities, and get their lives back on track.
How exactly does bankruptcy work when it comes to discharging tax debt? According to aboutmoney, Chapter 7 bankruptcy—which allows for the full discharge of allowable debts—and Chapter 13 bankruptcy—which allows people to repay some debts and discharge the remainder of them—are both viable options. Not all tax debts are eligible for discharge through bankruptcy, of course; but a good bankruptcy attorney can explain to you what is and isn’t possible.
In general, dischargeable tax debt must meet the following criteria: your tax return must not have been fraudulent (a no-brainer, but worth pointing out), you must not be guilty of past tax evasion charges, and the tax debt in question must pertain to a debt that was due at least 3 years before bankruptcy was actually filed. It’s important to note that the bankruptcy solution applies only to taxes that have been filed; debts that are the result of unfiled returns are not eligible.
All individuals filing for bankruptcy will need to present a copy of their most recent tax return to the court and to their creditors, so making sure that the necessary paperwork is in order is also key.
This process may sound complicated, but an experienced attorney can streamline the process and make sure all negotiations go smoothly. To find out more or to request a consultation, contact The Gil Law Firm at (334) 673-0100. With the right kind of help, tax debt doesn’t have to be a crippling thing, and bankruptcy can actually be the first step into a brighter future.