Tax Debt In Bankruptcy

Tax debt can be a crippling financial burden, but there may be some relief available through bankruptcy. When you file for bankruptcy, you are required to list all of your debts, including any outstanding tax obligations. Once your bankruptcy case is underway, an automatic stay goes into effect, which prohibits creditors from taking collection actions against you. This includes the IRS, meaning that they cannot seize your property or garnish your wages in an attempt to collect the debt.

Filing for bankruptcy can be a difficult decision, but it may be the best option for dealing with overwhelming tax debt. In most cases, tax debt is not discharged in bankruptcy. However, there are a few exceptions. There are a number of requirements to discharge tax debt in bankruptcy, but here are a few of the basis requirements. When taxes meet these criteria there is a good chance that the debt would be dischargeable:

• If the taxes are more than three tax years old
• If you filed the tax returns at least 2 years ago
• If there have not been any further assessments within the last 240 days

However, it is important to note that discharging tax debt in bankruptcy is not always a straightforward process. There are other criteria to meet before you can conclude that taxes a dischargeable.

If you are considering filing for bankruptcy, it is important to speak with an experienced Modesto bankruptcy attorney who can help you understand your options and make sure that you are taking the best possible course of action for your situation.