You are not alone if you dread tax day. Now that it has come and gone, you may be like many in Ohio and across the country who are left with a tax bill. You may even find that this year, like the last few, just added one tax debt on top of another.
If tax bills are burdening you, chances are you have other debt you struggle to pay each month. You may be wondering if bankruptcy will provide relief in your situation. It may surprise you to learn that bankruptcy can discharge some tax debt.
How do taxes qualify for discharge?
The two most common types of personal bankruptcy for which you may be eligible are Chapter 7 and Chapter 13. Chapter 7 allows the elimination of all qualifying debt and usually involves liquidating unnecessary assets. Chapter 13 modifies the amounts you owe on certain debts and discharges the remainder. Your tax debt may fit into either Chapter 7 or Chapter 13 bankruptcy if you meet these five stipulations.
If you owe money from tax returns you haven’t yet filed, you can’t include that in your bankruptcy until you file and the appropriate time has passed for the tax debt to qualify. Also, a bankruptcy court will require you to prove that you have filed your taxes for the four previous years no later than the date when your creditors first meet to discuss your bankruptcy petition.
Your creditors are within their rights to request a copy of your latest tax return to determine your ability to repay your debts. You will also have to provide a copy to the bankruptcy court.
How do I know if bankruptcy is right for me?
One way to find out the best options for your circumstances is to contact a bankruptcy attorney. An attorney with extensive experience helping people with unpaid tax debt will help you evaluate your situation and explore the alternatives that may relieve you of your burden of debt. If bankruptcy is not the best method for you, an attorney will offer advice and guide you in the best direction.
Are you ready to take the first step toward reaching your goals?
Contact us today to schedule a Initial Consultation with our Toledo, Ohio, attorneys.