File Bankruptcy for IRS Tax Debt

Columbus Bankruptcy Attorney

Personal bankruptcies of chapter 7 and chapter 13 are under the United States Bankruptcy Court and both can include debt towards Internal Revenue Service or IRS. Chapter 7 bankruptcies involves liquidation of estate for debt repayment while chapter 13 involves a repayment plan for making repayments towards debts over a period of three to five years.

The method to go about filing for bankruptcy for your IRS debts is:

• Collect all creditor and debtor information. All debtors must notify all creditors of a pending bankruptcy petition. All contact information of the creditors are needed as well as the amount owed to each. There are three types of creditors – secured, unsecured and priority unsecured, secured creditor would be having a mortgage on house etc. Unsecured creditor has no security interest and unsecured debt includes credit card etc. Priority unsecured debt is classified in the unsecured debt category but is given priority by law and includes child support and alimony.
• It is better to decide whether to go through it alone or hire professional help in from a bankruptcy attorney. An attorney can help in planning a strategy, complete bankruptcy proceedings and discharge debts. With the help of an attorney debtors can decide on which chapter bankruptcy to file for.
• Prepare the bankruptcy petition with the help of a bankruptcy attorney. List all IRS debts debtor might have. The fate of your IRS debts would be decided by bankruptcy court when it agrees to your plan.
• Make sure that you complete the bankruptcy plan terms in order to be granted discharge. On approval all terms of your bankruptcy plan should be followed diligently. With the awarding of discharge your bankruptcy has been successfully completed

Filing bankruptcy due to federal taxes owed to IRS is not possible in all cases. Prior to liquidating the tax debt through a bankruptcy it is mandatory to know rules and regulations pertaining to the same.

• If IRS debt is not more than three years old, it cannot be included in the bankruptcy case.
• People who have not filed taxes for three times consecutively are not permitted to file petition unless that clear their dues and paperwork in connection.
• Taxes from previous years can be included in a personal bankruptcy petition.
• If you are planning to file for a chapter 13 bankruptcy, which includes a reorganization plan, it is necessary to submit tax refunds for a couple of years in order to offset creditor’s losses.
• These rules stand true for all state and local taxes too which are less than three years old. Failure to pay owed taxes can lead to wage garnishments and property liens.

Our Chapter 7 - Chapter 13 bankruptcy attorneys handle debt relief cases in and around Columbus, Chattahoochee County and Muscogee County.