Filing Bankruptcy On Tax Debts
Income tax debts may be eligible for discharge under Chapter 7 or Chapter 13 of the Bankruptcy Code. Filing for bankruptcy is one of five ways to get out of tax debt, but you should consider bankruptcy only if you meet the requirements for discharging your taxes.
Chapter 7 v. Chapter 13 Bankruptcy Tax Debts
Chapter 7 provides for full discharge of allowable debts. Chapter 13 provides a payment plan to repay some debts, with the remainder of debts discharged. Under the current bankruptcy tax debts are treated identically in both Chapter 7 and Chapter 13 bankruptcies. Continue reading