Can Bankruptcy Relieve Me of Back Taxes?
When you file for bankruptcy, you are able to request a way to eliminate all of the debt you owe. The debt that you wish to list in your bankruptcy petition can also include taxes that you haven’t paid, both state and federal. These back taxes owed to the IRS can be reduced or completely discharged, but the criteria for doing so differs based on the category of bankruptcy that is filed. A Henrico VA bankruptcy law firm can help. Bankruptcy lawyers in Henrico will explain how the category you have filed under can impact how you are relieved of back taxes.
Chapter 13 Bankruptcy Tax Debt
When discussing your case with the attorneys at Canfield Wells LLP, they can show you the way tax debt is relieved under Chapter 13. Given that Chapter 13 is a repayment plan over a three to five-year basis of a portion of the debt decided by the creditors, taxes are included in the payment plan. They don’t have to be paid in full before filing for Chapter 13 bankruptcy.
Chapter 7 Bankruptcy Tax Debt
Relief of back taxes under Chapter 7 is different in that you must qualify based on a set of requirements. Bankruptcy lawyers in Henrico can explain them more in detail, but the requirements are:
•The debt is income tax debt
•A tax return was filed at least two years before filing for bankruptcy
•The income tax debt is at least three years old
•The debt has been assessed by the IRS at least 240 days prior to filing for bankruptcy
•You have not committed any fraud or tax evasion
The rules are intricate, but an attorney can guide you through the process. Lawyers have the legal expertise needed to petition for bankruptcy and can help avoid a denial of your case.
If you are in need of a Henrico VA bankruptcy law firm, contact Canfield Wells LLP today.