Navigating through tax debt can be overwhelming, but you’re not alone. At Stone Law Firm, with locations in Columbia, Florence, and Greenville, South Carolina, we understand the complexities surrounding tax debt and bankruptcy. Here’s what you need to know about finding relief from tax debt through bankruptcy:
1. Not All Tax Debts Can Be Erased
It’s important to know that while bankruptcy can offer a fresh start, not all tax debts are eligible for discharge. Generally, income taxes may be dischargeable if they meet certain criteria, such as being due for at least three years and filed on time.
2. Timing Is Key
The timing of your bankruptcy filing plays a critical role in tax debt relief. For income taxes to be considered for discharge, they must be assessed by the tax authority at least 240 days before filing for bankruptcy. This rule ensures that recent tax assessments are not immediately wiped out.
3. Different Bankruptcy Chapters Apply
Whether you file under Chapter 7 or Chapter 13 bankruptcy can affect how your tax debts are handled. Chapter 7 may allow for the discharge of qualifying debts, whereas Chapter 13 involves repaying a portion of the debts through a structured plan. Understanding which chapter you qualify for is crucial.
4. Tax Liens May Still Apply
If the IRS has placed a tax lien on your property before you file for bankruptcy, discharging the debt won’t remove the lien. Secured debts like these require specific strategies to manage, even in the case of bankruptcy.
5. Honest Mistakes vs. Fraud
Bankruptcy can provide relief for those who’ve made honest mistakes with their taxes. However, debts arising from tax evasion or fraud are not dischargeable. Transparency and honesty in your tax filings are essential.
6. Professional Guidance Is Essential
Navigating tax debt and bankruptcy laws can be complex and intimidating. That’s where Stone Law Firm comes in. With our extensive experience in bankruptcy law across South Carolina, we’re here to guide you through every step of the process. We’ll help you understand your options, evaluate whether bankruptcy is the right path for you, and develop a plan to move forward toward financial stability.
Should You Hire a Bankruptcy Attorney For Tax Debts?
Facing tax debt doesn’t have to be a journey you take alone. Stone Law Firm is dedicated to providing compassionate and knowledgeable legal support to help you resolve your tax debt issues. Whether you’re in Columbia, Florence, or Greenville, we’re here to help you explore your options and find a path to financial freedom. Contact us today to schedule a consultation and take the first step towards easing your tax debt burden.