How to Settle a Tax Debt with a Chapter 13 Bankruptcy
Bankruptcy shouldn’t ever be considered the “get out of debt” free option. Major consequences follow behind a bankruptcy filing. You could be restricting yourself from financial opportunities through this type of solution. Let’s first review exactly what it means to file for bankruptcy.
Bankruptcy. What Does it Actually Mean for You?
Filing for bankruptcy is officially reporting to the government that you acknowledge that you have outstanding debts to pay to various companies and agencies and you do not have the financial means to pay the debt. A bankruptcy filing will clear you of these debts, but at a price. Your credit score will take a major hit that will make it almost impossible for you to pull a line of credit with any bank or to even purchase a vehicle.
You’ll Pay More in Interest with a Bankruptcy Filing
Any line of credit that you do manage to get with a bankruptcy filing on your credit report will come with a hefty interest rate. Financial institutions that charge high-interest rates are merely trying to get as much money from you up front because your credit report shows that you have a history of not pay what you owe.
Bankruptcy filings can stay on your credit report for at least seven years.
Bankruptcy is a Solution, But Not Always the Best One
What most taxpayers don’t realize is that your tax debt may not go away with a bankruptcy filing. Certain stipulations have to come into play in order for your tax debt to be wiped away with a bankruptcy filing.
There are different types of bankruptcy filings, but the most common one is Chapter 13 for individual taxpayers and sole proprietors. Corporations typically file under Chapter 7 or Chapter 11. For the purpose this article, we’ll focus on Chapter 13.
When it comes to filing a Chapter 13 bankruptcy, the Internal Revenue Service (IRS) states that you must qualify for the following:
|4 Things The IRS Wants You to Know About Chapter 13 Bankruptcy Filing|
*Information in this table comes directly from the official IRS website.
Call The IRS or Success Tax Relief to Assist You
There is a great deal of information that you need to know about bankruptcy filing. To get a more thorough run-down of these procedures, call the IRS directly at 1-800-829-1040. If you prefer an immediate response, then contact Success Tax Relief for a free consultation at 877-825-1179 or ask us your questions online. We look forward to speaking with you soon!