If you find yourself owing the Internal Revenue Service (IRS) or the State for back income taxes, penalties and interest, and are unable to manage the required payments, consider Chapter 13 bankruptcy relief. Also, if you are one of the many failed business owners who find themselves personally liable for business income tax, sales tax and withholding taxes, consider Chapter 13 bankruptcy relief. Although, as a general rule, neither taxes nor student loans are dischargeable in bankruptcy, Chapter 13 may provide the breathing room you need.
Income taxes are a priority claim, meaning that the Govt gets paid before your unsecured creditors. If you have significant credit card debt, personal loans, medical bills and so forth, and some disposable income, you may be able to wipe out (“discharge”) most of this unsecured debt and pay off your income debt over a period of up to five years through your bankruptcy plan. Student loan payments, although a non-dischargeable debt and not a priority claim, can be spread out over time to be more manageable, thus providing valuable relief.
You may be entitled to the benefit of the breathing room a Chapter 13 Plan provides even if you are not eligible for a discharge! – If you filed and obtained a Chapter 7 discharge within the past 8 years you may not be eligible for another Chapter 7 discharge or for a Chapter 13 discharge if you filed for Chapter 13 relief in the past 4 years, subject to certain exceptions. However, as long as your plan is filed in good faith, and meets the requirements for filing a Chapter 13 plan, you can reduce the financial stress of being hounded to make larger monthly payments to your creditors than you can manage. If the court approves your proposed Chapter 13 Plan, the creditors, including the IRS, have to accept the payments as provided in the Plan.
Contact us now if you’re considering using Bankruptcy to help alleviate your obligations.