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Bankruptcy and Tax Debt

Avery Law

Under a Chapter 13 or Chapter 7 bankruptcy, income tax debts may be dischargeable. However, certain criteria must first be met, which we will review in this blog, so continue reading to learn more about bankruptcy and tax debt.

Dischargeable Tax Debt

Filing for bankruptcy can be a useful tool for repairing your financial health. If you cannot pay off your debts and want to take the first steps toward wiping the financial slate clean, this may be the best course of action for you.

For your tax debts to be discharged during this process, these are the requirements that must be met:

  • Your return was filed at least 2 years ago
  • The due date for filing the tax return was at least 3 years ago
  • Your tax return was not fraudulent
  • The taxes were assessed at least 240 days ago
  • You are not guilty of tax evasion

If your tax debt is not dischargeable, a Chapter 13 bankruptcy may be a better option for you. Through this type of bankruptcy, you will have the chance to pay your tax debts over a specified time frame. If a tax lien is not in place, interest will not accumulate on the taxes you owe once you begin the process of filing for bankruptcy.

Generally, a Chapter 13 repayment of taxes is smaller than an installment agreement due to the fact that interest will not continue to accrue after filing for bankruptcy. Ultimately, whether you can have your tax debts fully discharged or can repay them in a more manageable repayment plan, filing for bankruptcy can be immensely beneficial.

Get Started on Your Bankruptcy Case by Reach Out to Our Skilled Legal Team Today!

If you are struggling with tax debt, the bankruptcy team at Avery Law can provide the exceptional legal guidance you need to navigate every step of the bankruptcy process. Our team has more than 65 years of collective experience, which we will use to your advantage. We understand how difficult this situation may be for you and will provide the strong legal support you need to get through it as efficiently and smoothly as possible.

Reach out to our law firm today at (208) 285-2085 to set up a free consultation with one of our bankruptcy attorneys to get started on your case and learn more about what we can do for you.