If you are like many people here in Ohio and elsewhere, you live paycheck-to-paycheck. You may even have debts such as credit cards, auto loans and others that you struggle to pay each month. Then, when it comes time to do your taxes, you realize that you owe. Even though you may wait until the last minute to file your returns, you know there is no way you can pay your debt to the IRS.
Your budget is already stretched to the limit, and you may not even be able to pay off the IRS through an installment agreement or offer in compromise. You may begin considering bankruptcy, but most people will tell you that you can’t discharge back taxes by filing for bankruptcy. In general, this may be true, but under certain circumstances, you may be able to eliminate at least some of your tax debt.
Can any of your back taxes be discharged?
More than likely, you may not be able to discharge all of your tax debt through bankruptcy. However, if your debt falls within the following five requirements, you may receive some relief from your tax debts:
If your tax debt meets these criteria, you may be able to discharge it regardless of whether you file a Chapter 7 or Chapter 13 bankruptcy.
Do you hesitate to file bankruptcy?
If you do, you are not alone. Many people worry about the damage filing for bankruptcy can cause to their credit. Yes, filing will affect your credit, but at the same time, your current financial situation (including owing back taxes) has probably already irreparably damaged your credit. At least when you file bankruptcy, you can begin to rebuild your credit now that you have a fresh financial start. Most people’s credit shows improvement within 18 to 24 months after they receive a discharge.
Another factor that keeps some people from filing for bankruptcy is that they feel it’s wrong not to pay their debts. You probably had every intention of paying your debts, but your financial and life circumstances make that impossible. The bankruptcy laws exist to give people in your situation a chance to start over and make things better in the future. You deserve that chance.
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.