Many taxpayers are under the assumption that if they file for bankruptcy, this will clear them of every single debt they owe.
That’s not exactly true.
Now when you file for bankruptcy, it does temporarily stop the Internal Revenue Service (IRS) from collecting any tax debts. How long they stay away actually depends on what type of tax debt you have and which chapter of bankruptcy you’re filing for. All of this will have a direct affect on how your tax debt situation is handled.
No One Said Bankruptcy Would Be Easy
When it comes to tax matters, there’s really no easy way of explaining how things will work because each case is dealt with on an individual basis according to the taxpayer’s financial situation. That’s why it’s recommended to get some professional assistance in these matters because, let’s be honest, if you knew how the tax debt system actually worked, chances are you wouldn’t be in the situation you’re currently in. On the other hand, there are some professionals who may know exactly how everything works and still find themselves in a mess of debt due to sheer neglect.
LET OUR EXPERIENCE AND EXPERTISE WORK FOR YOU!
Advance Tax Relief, a tax relief firm with two offices in Houston, Texas and Los Angeles, California, has been in the business of helping people out of the tax debt for over 25 years. Throughout this time, we have come across a wide range of tax debt cases that have given us the experience and expertise to alleviate any tax issues that you have big or small.
WHEN YOU FILE BANKRUPTCY WHAT COULD HAPPEN?
So let’s talk about what exactly happens to your debt when you file for bankruptcy.
When you file for bankruptcy, an automatic stay is created. An automatic stay is a court order that ceases creditors and even the IRS from taking any action toward collecting debt from you. Creditors will have to address the court and ask its permission to try and collect from you. So, don’t exhale yet!
But let’s address the real question: Can your tax debt get wiped out if you file for bankruptcy?
The answer is that it depends. Depending on the nature of your case, ALL of your debt can get wiped out and in some cases, only a partial amount will be dismissed. If you didn’t commit fraud, then you have a better chance of wiping all of your debt out. Other factors such as how old the actual debt is will be taken into consideration as well. Typically, if it’s less than a year, then the chances of you having to pay that debt is probable, but here again, all of this is determined on a case-by-case basis.
BANKRUPTCY IS NOT ALWAYS AN EASY WAY OUT - BUT POSSIBLE!
The bottom line is that bankruptcy ought to be your last resort. There is a lot of paperwork involved and there isn’t a guarantee that all of your debt will get cleared. If you do decide to file for bankruptcy, don’t try and do it by yourself.
Consult a tax relief professional today for a free consultation at 713-300-3965 or Advance Tax Relief www.advancetaxrelief.com.