Reprinted by permission Most taxes can’t be eliminated in bankruptcy, but some can. You may hear radio commercials offering the hope of eliminating tax debts in bankruptcy. But it’s not as simple as it sounds. Most tax debts can’t be wiped out in bankruptcy — you’ll continue to owe them at the end of a Chapter 7 bankruptcy case, or you’ll have to repay them in full in a Chapter 13 bankruptcy repayment plan. If you need to discharge tax debts, Chapter 7 bankruptcy will probably be the better option — but only if your debts qualify for discharge (see below) and you are eligible for Chapter 7 bankruptcy . When You Can Discharge a Tax Debt You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true: The taxes are income taxes. Taxes other than income, such...
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