Discharging Tax Debt Through Bankruptcy
Many of our clients who are considering bankruptcy as a way to get control over their excessive debts are doing so, at least in part, because of their tax debts. In certain circumstances, taxes can be a main contributing factor for insurmountable debts. Although we generally discourage people from looking to the bankruptcy courts for tax debt relief, it is not impossible to use bankruptcy for tax-debt relief, and there are other options as well that we can help you with.
Contact us. Our attorneys can help you find options for relief from tax debts. We can look into the possibility of Chapter 7 bankruptcy or Chapter 13 bankruptcy, and we can help you find other options, as well. We serve clients in Beaumont, Orange and Corona, California.
Relief Options for Tax Debts
There are a few possibilities for managing excessive tax debt. If the income tax debt meets all five of the below rules, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions:
1. The due date for filing a tax return is at least three years ago.
2. The tax return was filed at least two years ago.
3. The tax assessment is at least 240 days old.
4. The tax return was not fraudulent.
5. The taxpayer is not guilty of tax evasion.
- Chapter 7 bankruptcy: It is possible to get at least part of your tax debts discharged through Chapter 7 bankruptcy, though it is very rare and quite difficult to achieve, requiring separate petitions and filings and a series of conditions that must be met for you to qualify.
- Chapter 13 bankruptcy: Chapter 13 bankruptcy can be a way to help reorganize your debts, including tax debts. At the very least, Chapter 13 bankruptcy can help you manage your non-tax related debts in such a way that gives the financial freedom you need to be able to catch up with your tax debts.
- Settlements and payment plans: In some instances, we can work with the IRS to create a unique payment plan or even settle the debt at a lower cost.
Sobti Law Group is not a late-night television debt-consolidation agency; we are a professional law firm that is dedicated to helping people like you find real and lasting solutions for excessive debt, including tax debt. We do everything we can to help our indebted clients find some kind of relief from their excessive debts, even if these debts come from back taxes that have piled up. We treat our clients with respect and dedication.
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