Does Bankruptcy Get Rid Of Tax Debt?
Large tax payments can come as a shock, especially if you do not have the money you need to pay it. Over time, this tax debt can compound with other financial struggles, forcing you to make hard choices about your future. Fortunately, our attorneys at Nicolet Law Office, can help. By consolidating debt and creating prudent financial plans, we have been able to assist many clients throughout Wisconsin. We look forward to helping you, too.
Call today for a free consultation on your tax debt.
Bankruptcy Pauses Collections
Anyone who files bankruptcy receives a so-called “automatic stay”, which means that their creditors—including the IRS—have to stop any efforts underway to collect on their debt. This means that wage garnishments will stop, phone calls will stop, and all other debt collection efforts will otherwise cease. This gives you some much-needed breathing room to assess your situation as the bankruptcy proceeds.
The Conditions For Discharging Tax Debt
Income taxes from the IRS can be discharged through Chapter 7 bankruptcy, but only under specific circumstances. You may be eligible if you meet all of these conditions:
- Your tax debt is from income tax
- The tax debt is at least three years old
- You have not had any new income taxes assessed in the last 240 days
- You have filed all of your tax returns
If your tax debt does not qualify, though, you still have options. Under Chapter 13 bankruptcy, tax debt can often be combined with other types of debt and rolled into a manageable monthly payment, which is tailored to your financial situation.
Start Your Tax Relief Strategy Today
It is never too late to begin turning your financial situation around. Our seasoned lawyers can help you quantify your tax burden and determine your best path forward. Contact us through our online form or else at our main office: 715-377-2141. We serve clients throughout Wisconsin from our offices in Hudson, Eau Claire and other convenient locations.