The end of the year has come and gone, which means consumers are thinking about filing taxes. For some consumers, the end of the tax year is a dreaded time, because they will fall only deeper into tax debt. If you have the IRS on your back for past due tax liability, bankruptcy can help. Bankruptcy is not just for credit card debts or medical bills, taxes can be managed, too.
If you are suffering from a heavy tax burden, here are a few reasons to consider bankruptcy as a solution:
- Release of Seizures and Levies – Bankruptcy court is powerful. If the IRS has a past due tax liability and you file bankruptcy, they cannot continue their collection efforts. You’ll be given a stay by the bankruptcy court, which will cease wage levies, bank levies, and even the seizure of real property.
- Favorable Payment Plans – The IRS does allow payment plans, but these are often burdensome and take years to pay off your tax debt, and the interest and penalties can be astounding. Bankruptcy consolidates those payments (through Chapter 13 bankruptcy) and creates a smaller payment and can even stop penalty accruals and interest charges.
- Shorter Collection Time-frames – The Chapter 13 repayment plan can shorten how long you pay off a debt. Typically Chapter 13 repayment plans last three years up to five years. The IRS, on the other hand, can collect up to 10 years. By entering a repayment plan with the courts, you reduce how long you’re dealing with the IRS.
- Penalties and Interest Are Gone – While you cannot erase tax debt, you can erase penalties and interest. Because these often add hundreds (if not thousands) to your tax bill, filing for bankruptcy could save you a ton of money.
- Pushed Into Uncollectible Status – In the event you cannot repay the IRS debt, your bankruptcy attorney can have the IRS agree to temporarily cease all collection efforts and label your account as “uncollectible.” The IRS may review your account every two years to see if you are still uncollectible, but that still means you could get a few years break from repayment.
If you have severe tax debt, contact West Palm Beach Bankruptcy Attorneys at the Law Office of Kelley & Fulton today. Our attorneys understand the IRS and more importantly, know how to get you relief from a heavy tax burden. We also understand that substantial debt can be stressful. Call now for a no obligation consultation by dialing 561-491-1200.