Bankruptcy offers you an opportunity to eliminate your debts and begin building a new financial life. It frees you from the burden of paying for debt that you’d otherwise never be able to pay off, and it can help you eliminate qualifying tax debt. Chapter 7 and Chapter 13 are the two most commonly filed chapters for consumer debt.
Why Choose Us at the Law Firm of Fesenmyer Cousino Weinzimmer?
Our team of tax debt attorneys understand the frustration and sense of helplessness you’re feeling with your tax liabilities and debts. We can help you find the best solution for your debts, which includes negotiating with creditors, defense against foreclosure, tax debt settlement, and filing under the chapter of bankruptcy that’s right for you. We make it a point to listen closely to your concerns and provide you with professional advice as how to proceed with resolving your debts.
We have offices in Columbus, Dayton, and Cincinnati to best serve you and your need for tax debt relief.
Call us at one of our offices at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to schedule a consultation and speak to a tax bankruptcy attorney today.
We’ll get working on your financial freedom as soon as you decide to take advantage of a legal debt relief option. You’ll get peace and freedom from bill collectors and leave your debts behind.
How We Can Help
Discharging tax debts in bankruptcy is possible, but your tax debt has to meet certain thresholds before it’s eligible. A tax bankruptcy attorney from Fesenmyer Cousino Weinzimmer can help you determine if your tax debts can be eliminated in bankruptcy as well as answer other questions you may have about how bankruptcy debt elimination works.
The Basics of Chapter 7 and Chapter 13 Bankruptcy
Chapter 7 and Chapter 13 both help you clear your consumer and tax debts, but Chapter 7, also known as a fresh-start bankruptcy, is over in about 4 months while Chapter 13 creates a three- to five-year repayment plan.
Chapter 7 Bankruptcy enables you to discharge (eliminate) most or all consumer debts. It is completed in about four months, so you can begin rebuilding credit quickly.
Chapter 13 is a consumer debt reorganization through which you consolidate some or all of your debts and repay them over a three to five year period. Once you’ve completed your payment plan, the remaining debts are discharged, freeing you from paying further.
How Bankruptcy Helps You Eliminate Your Tax Debts
The rules for discharging tax debt are limited, but if your outstanding debts qualify for discharge, you can be freed from paying them forever. Your tax debt has to meet the following criteria.
The outstanding taxes are income tax only.
Only income tax can be discharged in bankruptcy. Taxes in income from other activities, such as investments, are ineligible.
You did not try to commit fraud or willful evasion.
Any attempt to avoid paying your taxes, whether it’s filing a fraudulent tax return or trying to file using a fake Social Security number, will invalidate your efforts to eliminate your tax debt through bankruptcy.
The debt is at least three years old.
The tax return must have been due three years prior to your filing for bankruptcy. Count back three years from the current year to determine if the tax debt is old enough to qualify.
You filed a tax return for that year.
A tax return for the year in question needs to be filed for at least two years before filing for bankruptcy. In the event you file after your extensions have expired and the IRS filed a tax return on your behalf, your tax debt is ineligible for discharge.
The 240-day rule has passed.
The IRS has assessed the tax debt 240 days before you file for bankruptcy. This time limit can be extended if the IRS has suspended collection activity due to efforts you’re making to settle the debt.
In the event your tax debt meets these criteria, you may be able to discharge it in bankruptcy. It’s not always guaranteed that your tax debt will get discharged, because the criteria are so narrow. One of our bankruptcy attorneys can provide you with more guidance and insight as to the possibility of discharging your tax debts in bankruptcy.
Nondischargeable Tax Debts
As previously mentioned, the only type of tax debt that can be discharged in bankruptcy is income taxes. The nondischargeable tax debts include:
- Tax debts that are less than three years old
- IRS tax liens that were recorded against your property before you filed for bankruptcy
- Recent property taxes due within one year of your bankruptcy filing
- Withholding taxes for payroll (for small business owners)
- Other employment taxes
- Excise taxes and customs duties
- Non-punitive tax penalties on nondischargeable taxes
- Erroneous tax returns or credits related to nondischargeable taxes
You will still be responsible for payment of these debts no matter whether you file for Chapter 7 or Chapter 13 bankruptcy.
Contact Us and Get Help
Determining whether or not tax debts can be discharged is complex and full of uncertainty. The experienced and compassionate lawyers of Fesenmyer Cousino Weinzimmer are trained to identify these tax issues.
Delaying can only worsen your situation, so call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today. Call one of our offices at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) so we can determine what debt relief solutions will work best for you.
During your consultation at Fesenmyer Cousino Weinzimmer, we will evaluate your entire financial situation by looking at your income, your debts and your goals. Make sure to disclose any tax liabilities and correspondence from the Internal Revenue Service to your attorney at the consultation. We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case. We understand what you are going through and will walk you through the process.