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As we enter March and people finalize their taxes, some may worry about the tax bill they owe. It can be extremely daunting to owe Uncle Sam a large tax bill, knowing that this bill could result in substantial fines and even potentially jail time if unpaid. They may turn to a bankruptcy attorney, hoping they can discharge this tax debt through Chapter 7. Unfortunately, most tax debts are not dischargeable, but some could be. If you owe a large tax bill, it may be a good idea to speak to a bankruptcy attorney who can fully examine your particular situation and discuss your options.
In order to be tax debt to eligible for discharge in Chapter 7, a person must first qualify for Chapter 7 bankruptcy. This means passing the means test and not having filed this form of bankruptcy within the previous 8 years. If a person cannot meet the standard eligibility, they will be ineligible to discharge any tax debt.
If a person meets these obligations, they then must satisfy ALL of the following:
These are difficult conditions to meet mainly because the government wants to make sure that they get their money. If you find that you have a tax obligation that you cannot meet, there could potentially be other options available. For instance, an Offer in Compromise may be available to lower your tax bill. An experienced attorney can discuss your specific eligibility for reducing your tax obligation based on the facts of your individual circumstances.
At Westbrook Law Group, we can discuss your options if you find yourself deep in debt. While your tax bill may not be dischargeable, filing Chapter 7 might help you eliminate other bills in order to pay your tax debt. Chapter 13 could also reduce payments and help you get back on your feet while repaying your creditors and keeping important assets. To discuss your debt problems, contact Westbrook Law Group today for a free consultation.