- Free Consultation: (202) 448-5136 Tap Here To Call Us
Top 4 Tax Problems in Bankruptcy
The top 4 tax problems in bankruptcy are not particularly easy to avoid. For those facing money problems, taxes are often an afterthought. After all, paying taxes means less money in your paycheck. But the tax problems that most frequently occur in bankruptcy are actually violations of intuitive rules.
Tax Problems in Bankruptcy: Chapter 7
Nondischargeability. Chapter 7 bankruptcy will not discharge recent taxes. Likewise, Chapter 7 does not discharge late-filed taxes. Only taxes over three years old with returns filed on time can be discharged in Chapter 7 bankruptcy. Older taxes may be discharged in bankruptcy. Otherwise, taxes pass through the bankruptcy discharge for many Chapter 7 filers.
Security Bifurcation. If the IRS has liened against your real property, then they may possess a bifurcated claim against you. In other words, part of your tax liability may be treated as priority; some treated as secured; and still another part may be considered unsecured nonpriority and therefore eligible for discharge. Assess your liability carefully. Do not expect either the state or federal taxing authorities to correct their own oversights or mistakes.
Tax Problems in Bankruptcy: Chapter 13
Repayment in Full. Taxes are priority debts and therefore must be repaid in full during the course of the Chapter 13 plan. In some cases, that may simply reduce the payout to unsecured creditors. But in many other cases taxes may dramatically increase your monthly repayment amount. If you have assets to protect in a Chapter 13, your attorney should conduct a careful review of your total tax liability prior to filing your case.
Mandatory Filing Date. You must file your taxes on time to remain in a Chapter 13 bankruptcy. This year, that date is Tuesday, April 18, 2017. You may not file an extension to file your taxes in Chapter 13. You must file your taxes on or by Tax Day. In addition, you must also provide a copy of your federal and state tax returns to the Chapter 13 trustee. If you fail to do so, the trustee will file a motion to dismiss your case. Nobody enjoys filing taxes. But that will not suffice as an excuse to the court for not filing and submitting your returns.
Tax Problems in Bankruptcy
Tax problems frequently resolve themselves more easily once you are under bankruptcy protection. Take steps before you even file for bankruptcy. By filing your returns on time, many debtors are able to avoid the most common bankruptcy problems in bankruptcy. Sort out your tax situation with a qualified bankruptcy attorney.
They Called. They're Glad They Did.
Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
Brian handled a legal matter for me and he was fantastic. He kept me informed of all updates and resolved all issues that were presented. I highly recommend Brian to all seeking legal advice and services.
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
I wanted to share my sincere appreciation for Brian and the support he provided during a very difficult time for my grandmother. We were not wealthy, but Brian treated us with genuine kindness and respect, making sure we felt comfortable throughout the entire process. He took the...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
I came to Mr. Lee in a panic when I was experiencing health problems and the walls seemed to be closing in on me. Initially, I interviewed four attorneys seeking assistance with my situation. He was one of the most thorough and thoughtful people I’ve ever met. His kindness and...
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
Brian is an amazing lawyer. He was referred to me by a friend who was also pleased with his work. I found him to be affordable, efficient, understanding, and easy to talk to. He really cares for his clients and is very committed to doing his best. He is very knowledgeable and...
This is your last stop in your searches for an attorney. After numerous research and interview with many lawyers, I decided to hire attorney Brian Lee. He is extremely knowledgeable, personable, attentive and diligent. He went above and beyond to file my ch 7 bankruptcy and get a...
