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Qualifying to discharge tax debt through chapter 7

| Jan 9, 2018 | Blog |

Tax debts are some of the most difficult to reconcile, because they come with the full force of the government behind them. In some cases, tax debts lead to very difficult circumstances like wage garnishment more quickly than standard consumer debt.

If you face a personal tax debt burden that you cannot pay, it is wise to consider your debt discharge options as soon as possible. The longer you wait, the more your resources are likely to drain away. To give yourself the relief you need, don’t hesitate to consider what Chapter 7 bankruptcy may offer you.

No matter what kind of bankruptcy you use, it is never wise to attempt using one without professional guidance. These tools are very powerful, but are not simple or easy to navigate, and those who attempt to navigate them without professional help often make matters much worse. Be sure to seek out all the guidance you need to identify the benefits and protections you have available and ensure that your bankruptcy is fully effective.

Do you qualify for tax debt discharge?

Whether or not you may discharge any or all of your tax debt depends on a number of factors, from the type of tax debt you owe and the age of the debt, to the legitimacy of your other actions surrounding the tax debt.

The debtor must file proper tax returns for the years in which the debt accrued at least two years prior to filing for the bankruptcy, and the debt itself must be at least three years old before it is eligible for discharge.

Other aspects of your behavior surrounding the debt may affect the bankruptcy process. If you committed willful fraud or tax evasion, then you may not qualify for a discharge. Tax evasion includes many different actions, so be sure to carefully consider your past actions before spending additional resources to attempt a bankruptcy that is bound to fail.

Your tax burden itself is not the only thing you may discharge, depending on your individual circumstances. You may also qualify to discharge penalties on those taxes in some cases.

Get the help you need to create a fresh start

If you need help getting out from under a tax burden you simply cannot carry, reach out to an experienced bankruptcy attorney as soon as you can. With professional guidance, you may better understand the nuances of your circumstances, and see the full scope of the challenges you face as well as the benefits you have available.

Your tax burden does not have to control your finances indefinitely. With careful, patient work and guidance, you can take stock of your finances and take action to change your financial course for the better.

Facing Overwhelming Debt?