I have to tell you that I hear this one all the time. In fact, it is possible to discharge some portion of federal, state, and local income taxes in your bankruptcy along with any penalties or interest that are attached. However, this is not a blanket statement.
Due, filed, and assessed are three very different things, and all factors involving your tax debt must be considered. If you are filing late returns, amended returns, are being audited, if a late filing, an amended return, or an audit result in changes to your initial assessment these are factors that could affect the above rules.
These rules hold true whether you are filing for a chapter 7, chapter 11, or chapter 13 bankruptcy. Of course, there are certain circumstances that can bump all of these numbers around. Everyone’s circumstances are different and no bankruptcy case is ever “uncomplicated.” Many find this out by not hiring an attorney to handle their bankruptcy, and instead of getting a fresh start, they will see their petition dismissed. It is very important that if you have a dispute with your taxes, that you let your attorney know this prior to filing. Attorneys, after all, are not mind readers. We need to know the facts going forward as much as anyone else.
If you are filing a bankruptcy and have significant tax debt, you need an attorney. Even without significant tax debt, we do not advise that you proceed into a bankruptcy filing without legal advice. There is simply no way around that. An attorney will tell you what is possible and what is not possible in your filing, and will level with you about whatever interest, penalties, and taxes you will still face. We are not here to sell you sunshine, but to present a realistic picture of your legal and financial standing. Call our Fort Lauderdale or West Palm Beachoffices to set up a free consultation and we can get you on the road to that fresh start.
Judging from the popularity of the search term “DIY bankruptcy chapter 7” you would think that this legal procedure is… Read More
Laid-off employees of Pier-66 and Beachcomber can get free credit counseling at Van Horn Law Group. Read More
If you’re looking for help from a Fort Lauderdale bankruptcy attorney, contact the Van Horn Law Group. Read More