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Does a Chapter 13 Wipe Out IRS Tax Debt?

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<html> <head> <title>Does a Chapter 13 Wipe Out IRS Tax Debt?</title> </head> <body> <h1>Does a Chapter 13 Wipe Out IRS Tax Debt?</h1> <div class="info">Author: <a href="http://www.goinglegal.com/author_1_479992.html">Dori Faxton</a></div><div class="body">Bankruptcy is a powerful tool for people who owe money in America, but it cannot eliminate all debts. The idea that it can simply wipe the financial slate clean is a canard. As a general rule, bankruptcy protection can help people get rid of credit debt and other unsecured debts. However, it will not help them settle student loans, child support payments, and most tax debt. In this article we will focus on tax debts, since they are the most common.<br /> <br /> Over twenty million Americans owe more than two hundred billion dollars in back taxes, according to the IRS. Some taxpayers who are in arrears choose to file for bankruptcy protection. Reducing or eliminating tax debt in bankruptcy isn’t easy, but it is possible.<br /> <br /> The two most common types of bankruptcy protection for individuals are Chapter 7 and Chapter 13. Of the 1.6 million Americans who filed for bankruptcy in 2010, most of them filed for Chapter 7. This type of protection gives the debtor the opportunity to eliminate most of his debts, including some tax debt. But the applicant must meet some very rigid requirements even to qualify. He may also lose his assets.<br /> <br /> Chapter 13, on the other hand, will protect your assets from seizure and your home from foreclosure, but it will require you to pay your tax debt within 3 to 5 years. As you might imagine, this type of bankruptcy protection is particularly attractive to taxpayers who have substantial assets.<br /> <br /> <b>Where to begin?</b><br /> <br /> Bankruptcy laws are complex and are constantly changing. Some <a href="http://www.txmstr.com/">tax advisors</a> spend their entire careers studying bankruptcy laws and offering their services to tax debtors. They can be particularly helpful to people who are considering Chapter 13 bankruptcy protection.<br /> <br /> Filing for bankruptcy is a process that requires several important steps. These steps must be taken properly, or protection will be denied. The process begins when the debtor provides proof of recent tax returns. He will need to submit copies of his state and federal tax returns from the previous four years. These returns must be in order or the trustee may dismiss the case. A tax consultant will review your financial records before they are filed with the bankruptcy court.<br /> <br /> The reason most people file for Chapter 13 bankruptcy protection is to save their homes from foreclosure. In the wake of the housing crisis, there has been a sharp uptick in the number of filings. No matter how much they owe, Chapter 13 can halt foreclosure and force a lender to accept an installment plan that lets the debtor remain in his home. Of course, the debtor must first demonstrate that he can make theses monthly payments and repay the money he owes.<br /> <br /> Tax advisors are invaluable at every step along the way. They can help the debtor get his records in order, file papers, and represent him in bankruptcy court. An experienced tax consultant may also be able to negotiate a more favorable repayment plan.<br /> <br /> <br /> For more information about <a href="http://www.txmstr.com">tax consultants</a> or tax advisors you may visit http://www.txmstr.com.</div> <div class="source">Article Source: <a href="http://www.goinglegal.com/does-a-chapter-13-wipe-out-irs-tax-debt-2188591.html">http://www.goinglegal.com/does-a-chapter-13-wipe-out-irs-tax-debt-2188591.html</a></div> <div class="author"> <div class="authorBio"></div> </author> </body> </html>

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Does a Chapter 13 Wipe Out IRS Tax Debt? Author: Dori Faxton Bankruptcy is a powerful tool for people who owe money in America, but it cannot eliminate all debts. The idea that it can simply wipe the financial slate clean is a canard. As a general rule, bankruptcy protection can help people get rid of credit debt and other unsecured debts. However, it will not help them settle student loans, child support payments, and most tax debt. In this article we will focus on tax debts, since they are the most common. Over twenty million Americans owe more than two hundred billion dollars in back taxes, according to the IRS. Some taxpayers who are in arrears choose to file for bankruptcy protection. Reducing or eliminating tax debt in bankruptcy isn’t easy, but it is possible. The two most common types of bankruptcy protection for individuals are Chapter 7 and Chapter 13. Of the 1.6 million Americans who filed for bankruptcy in 2010, most of them filed for Chapter 7. This type of protection gives the debtor the opportunity to eliminate most of his debts, including some tax debt. But the applicant must meet some very rigid requirements even to qualify. He may also lose his assets. Chapter 13, on the other hand, will protect your assets from seizure and your home from foreclosure, but it will require you to pay your tax debt within 3 to 5 years. As you might imagine, this type of bankruptcy protection is particularly attractive to taxpayers who have substantial assets. Where to begin? Bankruptcy laws are complex and are constantly changing. Some tax advisors spend their entire careers studying bankruptcy laws and offering their services to tax debtors. They can be particularly helpful to people who are considering Chapter 13 bankruptcy protection. Filing for bankruptcy is a process that requires several important steps. These steps must be taken properly, or protection will be denied. The process begins when the debtor provides proof of recent tax returns. He will need to submit copies of his state and federal tax returns from the previous four years. These returns must be in order or the trustee may dismiss the case. A tax consultant will review your financial records before they are filed with the bankruptcy court. The reason most people file for Chapter 13 bankruptcy protection is to save their homes from foreclosure. In the wake of the housing crisis, there has been a sharp uptick in the number of filings. No matter how much they owe, Chapter 13 can halt foreclosure and force a lender to accept an installment plan that lets the debtor remain in his home. Of course, the debtor must first demonstrate that he can make theses monthly payments and repay the money he owes. Tax advisors are invaluable at every step along the way. They can help the debtor get his records in order, file papers, and represent him in bankruptcy court. An experienced tax consultant may also be able to negotiate a more favorable repayment plan. For more information about tax consultants or tax advisors you may visit http://www.txmstr.com. Article Source: http://www.goinglegal.com/does-a-chapter-13-wipe-out-irs-tax-debt-2188591.html About the Author:

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Does a Chapter 13 Wipe Out IRS Tax Debt?

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