South Florida Bankruptcy Lawyer

Taxes and Bankruptcy

It may be a hard pill to swallow, but the plain and simple truth is that the majority of your tax debts cannot be discarded in bankruptcy. You will continue to owe them at the end of a Chapter 7 case and if you are filing under Chapter 13 you will have to repay them in full as part of your plan. However, of the two, it is more likely that you could have some of your tax debt wiped out in Chapter 7.

Discharging a Tax Debt

Having tax debt wiped out because not only do you have to qualify for Chapter 7 bankruptcy, you also have to meet all of the conditions listed in the bankruptcy code. The taxes must be income taxes because payroll and fraud penalties can never be eliminated in bankruptcy.

The person filing for bankruptcy cannot have committed fraud or willful evasion. The debt that is being considered must be at least three years old and the debtor must have filed a tax return.

The “240-Day Rule”

Your income tax debt must have been assessed by the IRS at least 240 days prior to you filing your bankruptcy petition. You must meet this requirement, or not have had your tax debt assessed at all.

If you are facing a financial crisis and feel like you have exhausted all of your options, considering bankruptcy may be your step towards financial freedom.

Speak with a South Florida Bankruptcy Lawyer

Contact the South Florida bankruptcy lawyers of Eric N. Klein & Associates, P.A. at 561.353.2800 for an initial consultation. We will discuss your current financial situation and how filing for bankruptcy can help you regain control of your life.