It is possible that some unpaid back taxes can be discharged in Chapter 7 or Chapter 13 bankruptcy, but it is subject to a number of rules and other criteria.
Tax debts are often considered priority debts in both Chapter 7 and 13 bankruptcy cases. This means they generally are paid prior to normal unsecured debts when assets are liquidated in a Chapter 7 and they will be paid prior to general unsecured debts in a Chapter 13 payment plan. Also, priority taxes are not dischargeable, so we will make sure that they are paid prior to the end of your Chapter 13 so that you exit bankruptcy completely debt free.
Dischargeable tax debt under a Chapter 7 bankruptcy filing needs to meet certain criteria:
- When the taxes were due
- When the returns were filed
- When the returns were assessed
- Whether any criminal activity is associated with the tax debts
Schedule an appointment with us for us to analyze whether or not your tax debts are dischargeable in bankruptcy.