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Is There A Tax Debt Discharge In Bankruptcy?

Is There A Tax Debt Discharge In Bankruptcy?

: Richard West Law Office

tax returnOne of the most common debts that many individuals end up with that gets out of control is their tax debt. They may have fallen into arrears and penalties and interest just keep mounting. There is no light at the end of the tunnel for being able to pay this debt off because of the other debt load the individual is faced with. The thought may come to mind that they will simply file for bankruptcy and wipe out all of this debt including their tax debt. What they don’t realize is that getting a tax debt discharge as part of the bankruptcy relief can be very difficult. It is most important that any individual that is even considering bankruptcy, first speak with a bankruptcy attorney. It is not wise to make decisions on assumptions or hearsay of others who believe they know what the bankruptcy laws entail.

When it is possible to discharge tax debts the best approach for this is under the Chapter 7 bankruptcy. To totally wipe out all of your tax debt there is a lot of criteria that has to be met. For example, only income taxes will be considered. If the tax debt is as a result of payroll or fraud penalties the debt will not qualify. If it has been deemed that you intentionally avoided paying taxes then this will be another reason your debt will not qualify. These are just a few of the criteria that must be met. It is imperative that you speak with one of our Cincinnati bankruptcy attorneys who is familiar with tax debt as it relates to bankruptcy discharge.