When you’re burdened by IRS tax problems in Los Angeles, bankruptcy can provide solutions to regain control of your financial life. In this blog post, we’ll explore how Chapter 7 or Chapter 13 bankruptcy can help Los Angeles residents address IRS tax issues effectively.
Facing IRS tax problems can be overwhelming. The IRS has substantial powers to collect tax debts, including wage garnishment, bank levies, and tax liens. For Los Angeles residents grappling with mounting tax debts and the looming threat of IRS actions, bankruptcy offers a legal and strategic approach to finding relief.
Chapter 7 bankruptcy, often called “liquidation bankruptcy,” provides a fresh start by discharging qualifying unsecured debts, including some tax debts. While not all tax debts are dischargeable, income tax debts that meet specific criteria can be eliminated through Chapter 7 bankruptcy. Key points to consider:
Eligibility Criteria: To discharge tax debts in Chapter 7, the tax debt must meet specific criteria, including that the tax return was filed on time, the debt is at least three years old, and the tax assessment is at least 240 days old.
Non-dischargeable Taxes: Some tax debts, such as payroll taxes and fraudulent tax returns, are generally not dischargeable in bankruptcy.
Secured vs. Unsecured Tax Debt: Secured tax debts (with tax liens) may not be fully discharged, but bankruptcy can help manage these debts effectively.
Chapter 13 bankruptcy allows Los Angeles residents to create a structured repayment plan to address IRS tax problems. This form of bankruptcy provides several advantages:
Debt Consolidation: Chapter 13 combines all debts, including tax debts, into a manageable monthly repayment plan.
Tax Lien Avoidance: Chapter 13 can help remove IRS tax liens from your property under certain conditions.
Extended Timeline: Chapter 13 extends the timeframe for repayment, often making it more feasible to catch up on tax debts.
Navigating IRS tax problems through bankruptcy can be complex. Consulting an experienced bankruptcy attorney from Winterbotham Parham Teeple, a PC in Los Angeles is crucial to understanding your options, eligibility, and the best course of action. An attorney can help you determine which bankruptcy chapter is right for your unique tax situation and ensure that you follow the appropriate procedures.
For Los Angeles residents facing IRS tax problems, bankruptcy can offer a lifeline to financial recovery. Whether pursuing Chapter 7 for debt discharge or Chapter 13 for structured repayment, consulting a bankruptcy attorney is the first step to finding effective solutions. Regain control of your financial life and address IRS tax issues with confidence.
If you’re in Los Angeles and dealing with IRS tax problems, contact Winterbotham Parham Teeple, a PC at 800.400.9000 for expert guidance on bankruptcy solutions tailored to your needs.