Taxes and bankruptcy are both very complicated matters on their own, so adding the two together can be complex, and quite stressful.  There are two different types of bankruptcy that consumers typically choose from – either Chapter 7 or Chapter 13 bankruptcy.  Depending on which type of bankruptcy you choose, your tax debts will be dealt with differently.  There is an abundance of information available to consumers like you, professing to help you eliminate your tax debt as part of your bankruptcy.  While such information may be accurate in some circumstances, it could be inaccurate in others.  As such, if you have both tax debt and a pending bankruptcy proceeding (or plan to file for bankruptcy), consulting with an attorney is essential to protecting your rights and interests.

How Can Tax Debt Be Eliminated as Part of My Bankruptcy?

Whether or not tax debt can be eliminated as part of your bankruptcy depends upon what type of bankruptcy proceeding you are currently involved in.  If you have a pending Chapter 7 bankruptcy proceeding, or plan to file for Chapter 7 bankruptcy, you may be able to eliminate tax debt if certain requirements are met.  If you do not meet the requirements, you will still owe your tax debt at the conclusion of your Chapter 7 bankruptcy.  With Chapter 13 bankruptcy, you may be able to eliminate your tax debt as part of your repayment plan.  It will take a careful evaluation of your financial situation to determine if you meet the requirements to eliminate your tax debt through your bankruptcy proceeding.

An Important Note About Tax Liens

Owing taxes to the government is one thing, but having a tax lien on your property is an entirely different issue.  If you plan to file for bankruptcy, it is important to understand that any tax liens that have already been attached to your property cannot be discharged through bankruptcy.  In order to get the lien removed, you will have to pay back the IRS outside of the bankruptcy process.  However, this should not deter individuals from pursing bankruptcy as a means of eliminating debt.  While existing tax liens cannot be discharged through bankruptcy, being able to discharge other debt will enable you to eventually pay off the debt attached to your property.  A qualified legal professional can help you determine what debt-elimination plan will work best for your situation.

Contact Kansas City Bankruptcy Attorney Douglas Breyfogle Today to Schedule a Free Consultation

Debt comes in many shapes and forms, but tax debt can be especially stressful.  All people hope to receive a refund on Tax Day, but oftentimes find themselves with a huge tax bill that simply cannot be paid right away.  Even with repayment plans provided by the IRS, tax debt may simply be too much when taking into consideration your other existing debt.  If you have turned to bankruptcy as a way to eliminate your debt, and have tax liens (or expect to have a tax lien assessed against you), it is crucial that you understand how a tax lien can impact your bankruptcy.  Kansas City Bankruptcy Attorney Douglas Breyfogle has spent more than 20 years helping Kansas City consumers go through the bankruptcy process, and he has the experience and dedication to provide you with the legal representation that you deserve.  Don’t let debt control your life.  Take the time to speak with an attorney and you will have a better idea of what your options are and how to address tax debt as well as any other debt.  To schedule your free consultation to speak with Douglas Breyfogle, contact our office today by calling (913) 742-8700.