Taxes and Bankruptcy: The Nuts and Bolts
Back Taxes and You!
You’re worried about not paying some money that you owe the IRS? Why shouldn't you be worried? Back taxes owed are nothing to ignore! What's that you say? You don’t have the money and you can’t raise it! If you owe state, federal, or local taxes and you are behind in other payments to creditors, federal laws can give you assistance.
Filing bankruptcy stops tax garnishments!
Many times, the biggest pressure on you is the garnishment the IRS or state revenue office has in place is a garnishment that is taken out of your wages and away from your family. The money that is desperately needed to take care of you and your family is taken by the IRS or state revenue office. Filing bankruptcy stops tax garnishments cold. As soon as the taxing authority finds out about your bankruptcy, it must act immediately to stop the garnishment. How powerful is that? It does NOT matter what type of tax you owe. The garnishment must stop. You may still owe the tax, but with the garnishment stopped and the other powers bestowed upon you by filing bankruptcy, you are in a better position to deal with the tax on terms you can afford. You’re in control instead of them. If the tax is a kind that you can get rid of in bankruptcy, that is the end of the garnishment forever.
A Lot Of IRS Income Taxes Are Dischargeable:
Next, if your problem is income taxes as opposed to withholding taxes, we first look to see how old it is. Why? If the taxes you owe are more than three years old, you may not have to pay them back at all. Let me repeat that: you may not have to pay them back at all. Most people and even some bankruptcy attorneys don't know this, but the fact is that certain older taxes are dischargeable, which means you can get rid of them by filing bankruptcy. There are four rules to apply to see if your back income taxes are dischargeable, and fortunately for you, we know the rules inside and out. We apply these rules all the time and we know how to get accurate information from the IRS itself to verify what you owe and whether it is dischargeable under these four rules.
Suffice it to say, we get rid of hundreds of thousands of dollars in income taxes for our clients every year.
What about the taxes I can't get rid of?
We can get you up to 60 months to pay the taxes you can’t get rid of back. This assumes you file the “Loan Consolidation” type of bankruptcy case. This is also called Chapter 13 case.
What does this mean? It means you can get the IRS off your back for 60 months. It means you can set up payments that may be affordable. For instance, if you owe the IRS $12,000 in non-dischargeable taxes, in most cases you can force the IRS to take payments as little as $52 per week. In many if not most cases, you can also force the IRS to take payments without adding interest. Making weekly payments are a lot better than worrying, having the IRS grab your stuff, placing a levy on your bank account, garnishing your wages or having to come up with $12,000.
Disclaimer:
Sure there’s more to it than just this, but it’s complicated to generalize and cover everyone’s potential situation. Results will vary. This example and explanation covers a good general description of how federal law takes a situation and fixes it for you. This information is general but demonstrates that even a bad situation allows some fantastic possibilities if you talk to the right person.
The Law Offices of John T. Orcutt has handled thousands of such situations and can talk with real expertise in these matters. Not everyone can boast such numbers. We can sincerely help most people that come in and talk to us.
The problem will never just go away by itself! You need to take some action and it has to be the right action. Call for a FREE confidential appointment. We will give you all of your options.
Call now for a free initial consultation. We can help!
We can solve most of your financial problems and a few more that you might not know you have.
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