Any significant debt is a concern, but when your creditor is the IRS or the State of California, it can seem even more intimidating. Special rules apply to the treatment of past due taxes in bankruptcy, and at Gates Law Group, A Professional Corporation, attorney Glen Gates can advise you whether relief is available in your case. Our firm has offices in Fresno, Paso Robles and Visalia to serve clients throughout the San Joaquin Valley and surrounding areas. Regardless of the particular challenges you’re facing, we can find the best way to modify or eliminate your tax obligation.
Most people associate Chapter 7 bankruptcy with the elimination of unsecured debts, such as credit card balances and payments owed for medical treatment. People often presume that tax obligations are like student loan debt and cannot be cleared through this process. However, under certain circumstances, you can discharge what you owe to tax authorities if the following conditions apply:
In sum, bankruptcy is not a means to avoid a current or recent tax bill. The IRS and California Franchise Tax Board have numerous methods by which they can collect past due obligations. However, if the requisite timeframes have passed, our firm can explain if you can discharge back taxes as part of the Chapter 7 process. Bankruptcy will not release tax liens that have previously been attached to your property due to failure to make a required payment.
Should you choose to file for a Chapter 13 bankruptcy, any money you owe in taxes will be classified as either a priority or nonpriority debt. Priority taxes have to be paid in full under the Chapter 13 plan, though creating a court-approved schedule can spread those payments over three to five years to ease your burden. Previous income taxes that would be dischargeable under Chapter 7 are classified as nonpriority debts. Depending on your circumstances, some of your nonpriority taxes might be paid back from your disposable income, but the balance would be eliminated if you abide by the repayment schedule. Attorney Glen Gates can evaluate your situation and guide you through the Chapter 13 process, if that is the best option.
Gates Law Group, A Professional Corporation represents California clients in Chapter 7 and Chapter 13 bankruptcy matters. If you are having difficulty paying what you owe to tax authorities or are facing problems with another type of debt, we can help. Please call 559-432-9944 or contact us online to schedule a consultation. We serve clients at our main office in Fresno and locations in Paso Robles and Visalia.