Bankruptcy and the IRS
A bankruptcy can help you with IRS debts, but there are rules to go with that. Most important thing with the IRS you must have filed your taxes. If you did not file the IRS has more to say in what can happen in your bankruptcy.
A chapter 13 bankruptcy will stop all interest and penalties from increasing on the debt you owe. For tax years more than three years old and you filed your return can be discharged. Example of how this could work: For the last five years you owe the IRS 5,000 each year and your filed your return. With this debt your have another 10,000 in credit cards. Your plan payment could be 330 a month for 60 months. At the end of the plan the IRS will have received all the money you have to pay and the credit cards the same thing. Of the 35,000 you owe you paid out less than 20,000. This payout includes most of the attorney fees and the bankruptcy trustee’s fees to pay out the money. The chapter 13 will fall off your credit two years later. Because of the bankruptcy hopefully you have learned to budget you money not to owe the IRS at the end of the year ever again.
Please fill out our free evaluation form to determine if bankruptcy is right for you.
