Can filing a Bankruptcy Provide You with Leverage to Deal with Tax Debt?
By Larry Karandreas Tax debt can create a large financial impact on people’s lives. While you may be able to settle tax debt with the IRS, many times people do not have the cash to make a lump-sum settlement. When the IRS sets-up a payment plan, those plans can take years to complete, with interest accruing on the entire balance owed until paid off. Hiring a Phoenix Bankruptcy Attorney to help you file a Chapter 7 or Chapter 13 bankruptcy can provide you with the necessary tools to take control of your tax debt, and in some cases, completely eliminate the debt owed with no additional payments to the taxing authority.
Even if the IRS or state of Arizona is about to levy your wages or bank accounts, or if they have started a levy, the automatic stay of 11 U.S.C. §362 will stop the taxing authority from continued collection activity in most cases.
Many people, including tax professionals, fail to realize the potential for tax elimination that a bankruptcy provides. Even if you cannot completely eliminate a tax debt, you can, in most cases, manage the amount of payment to be made on a monthly basis, eliminate penalties owed, and stop the accrual of interest through a Chapter 13 filing. Even if the taxing authority has a lien, a Chapter 13 bankruptcy can help reduce the amount owed through a plan of reorganization, and in the end, you will be free from all dischargeable debt.
When you are dealing with a tax debt, it is important that you hire an experienced Phoenix Bankruptcy Attorney to protect your rights under the bankruptcy laws. I offer free initial consultations by phone, or in person, to help guide you toward a successful resolution of your financial problems. Call to schedule a free consultation. You have nothing to lose but your debt.