Tax Discharge Process in Bankruptcy
Generally, tax debt, including interest and penalties, is not discharged by bankruptcy. After a successful Chapter 7 bankruptcy, most debt is discharged, but tax debt is excluded from the discharge order. In a Chapter 13 bankruptcy, tax debt must be paid 100% through the 3 to 5-year payment plan.
Taxes may be discharged if the tax return was filed on time and the tax debt has been owed for more than 3 years. For example, if the 2006 Federal income tax return was filed on time and no extensions were requested, a bankruptcy filed after April 15, 2010 will result in those tax debts being discharged.
Collection of Taxes are Stayed by Bankruptcy
Upon filing of a bankruptcy petition, garnishments, levies and other seizures are stopped by the automatic stay in bankruptcy. In Chapter 7, after entry of a discharge order, the tax authority may resume actions to collect taxes that have not been discharged. In Chapter 13, upon approval of a payment plan, the tax authority must wait for payments from the bankruptcy trustee.
Colorado Tax Relief in Bankruptcy
The attorneys at George T. Carlson & Associates have advised and represented numerous clients in discharging their tax debts. With more than 40 years handling bankruptcy cases and discharging taxes we are able to provide legal guidance and advice throughout your case. If you are facing bankruptcy and owe a considerable amount of taxes we are able to help you.
Contact a Denver, Colorado Bankruptcy Lawyer Today
If you are seeking legal representation or would like more information about our services, contact our office today for a free consultation with an attorney. You can reach an experienced attorney toll-free at 303-789-1313 or by contacting us online.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
