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Is tax debt relief possible through bankruptcy?

On Behalf of | Jan 20, 2016 | Chapter 7 Bankruptcy, Firm News

As the old saying goes, there are only two things in life that are guaranteed — death and taxes. Most Florida residents are under the impression that there is no way to escape a tax debt, but that might not be entirely true. Many people do receive tax debt relief by filing for bankruptcy, but certain conditions must be met before the debt is eligible for discharge.

In a Chapter 13 bankruptcy, the repayment plan could include tax debt. In a Chapter 7, the tax debt must meet specific conditions before being eligible for discharge. The requirements include how long it has been since a federal return for the particular debt was filed. In addition, the taxes must have been assessed no less than 240 days prior to the filing of the petition.

Most importantly, the Bankruptcy Court will want to know that you did not commit fraud when filing the returns in question. Furthermore, you will be required to show that you are not purposely trying to evade paying the taxes you owe. If all of the prerequisites are met, the taxes might qualify for discharge.

Bankruptcy proceedings can be complex enough without adding the request for tax debt relief to the mix. It would not be advisable to attempt to navigate such an important road alone. Being free from consumer debts can give an individual a new lease on his or her financial life, but mistakes or omissions can derail that dream. Working with a Florida bankruptcy attorney might help increase the odds of getting back on track financially.

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