You should think about several things seriously if you are going to file bankruptcy.
First and foremost you should do everything you can to save yourself as much money, trouble and time as you can. Take some time and discuss this with your bankruptcy lawyer, you may have to be forceful to accomplice this as they may want to come up with quick solutions to get your case in front of the judge and finalized.
Under chapters 7 and 13 your tax debt may be eligible to be wiped out. If you do file for bankruptcy this is one of five ways for you to get out of tax debt. Its not quite as simple as just filing bankruptcy; you also have to meet other requirements to be eligible. Before you actually decide to file you should insure your efforts would not be in vain by determining beforehand that you meet the requirements to get out of tax debt.
Once you are sure you meet the requirements its time to decide if you will file under chapter 7 or chapter 13. With chapter 7 you will be able to get your debt fully discharged up to the allowable limits. Chapter 13 will normally be a payment plan put in place and you will have to pay back a portion of the debt you incurred while the rest will discharged.
If you are hoping to have your taxes taken care of when you file bankruptcy there are five criteria you have to meet.
- You cannot be guilty of tax evasion.
- The date the tax was due was at least 3 years ago
- The tax return was filed at least 2 years ago
- The tax assessment is at least 240 days old
- The tax return cannot have been fraudulent
If you can meet all of the above chances are you can have the tax debt discharged when you file for bankruptcy.
Although bankruptcy may seem a great way to clear your debt there are consequences that come along with this decision. Your credit will plummet and it will take you years to rebuild your credit score. If your filing just to get your taxes discharged you might want to consider some other options. You can set up a payment plan with the IRS or visit one of the many sites that offer ways of getting out of debt without bankruptcy. Basically if there are other options, don not file, but if you have no other option and you have been told bankruptcy is your best chance for starting over, then talk to your lawyer and decide if chapter 7 or chapter 13 is the right one for you.
Doug Sheridan is involved in many online ventures. He researches and supplies information to help people make wise and informed decisions. http://finance.opertoonity.com
Filing Bankruptcy - Understanding Non-Dischargeable Debts
Many people have the misconception that filing bankruptcy will erase all their liabilities. There would be no obligation to pay the amounts that they owe to their various creditors. However, this not true at all. There are certain kinds of loans that have been considered as non-dischargeable ones. Filing under chapter 7 will eliminate all kinds of ...
NJ Bankruptcy Court
Filing for bankruptcy and taking your case to NJ bankruptcy court can be a difficult task. Deciding to file for bankruptcy is never easy, but it may be your only option if you are only making the minimum payments on your debts or if you cant create a budget to get yourself out of debt in the next five years. While many of your debts may be discharg...
California Bankruptcy - Options For Tax Bankruptcy
When it is about California bankruptcy, there are two options for tax bankruptcy as per chapter 7 and chapter 13 respectively. As per chapter 7, the trustee appointed by the court liquidates all the assets of the taxpayers while as per chapter 13, the payers get a chance to continue with their business operations in order to manage their finances a...
What Debts Are Exempt From Bankruptcy
When filing for bankruptcy the aim of most people is to sort out their financial situation. They may have made a number of mistakes with their money in the past that has lead to large debts or maybe they have just been irresponsible. Whatever the reasons, the hope is that they can start a fresh by either clearing all the debts or by getting a payme...
Chapter 13 Bankruptcy What Exactly Does It Mean?
Chapter 13, Title 11, United States Code, this section of bankruptcy refers to the way an individual person can choose to go through a reorganization that is lead by the federal bankruptcy court. The Bankruptcy Code says that the ultimate goal of Chapter 13 is to allow debtors who have a steady income to agree to a court supervised repayment plan. ...
Bankruptcy FAQs
As far back as colonial times, every citizen has a constitutional right to file for bankruptcy. By declaring bankruptcy, one is relieved of mandatory collection activities for debts existing at the time of filing by a legal "stay" on these activities. The first version of US bankruptcy or Federal Insolvency laws appeared in 1800, and has been evolv...
Bankruptcy - Not for the Faint Hearted
Inability or impairment of ability of individuals or organisations to pay off their creditors is known as bankruptcy. Normally individuals and business establishments initiate the process of bankruptcy but sometimes a group of creditors can ask for a declared state of bankruptcy in order to recover money owed to them.The law of bankruptcy serves t...