Owing money to the Internal Revenue Service (IRS) is enough to give anyone a reason to be concerned. The IRS enjoys many advantages over other creditors when it comes to collecting on the money that a taxpayer owes. For example, while bankruptcy proceedings can wipe out many forms of debt, it is far more difficult to use this option to get rid of your tax debt. In some cases, it may be impossible. However, that does not mean you should rule this option out entirely. Consult with our experienced tax attorneys to determine whether bankruptcy is a viable option for clearing your tax debt.
Is Bankruptcy a Viabile Option for Resolving YOUR Tax Debt?
If using bankruptcy proceedings to get rid of tax debt owed to the IRS is so difficult, why should you even consider it? Following are five important reasons:
- Even if your tax debt does not qualify for discharge as a result of bankruptcy proceedings, you may be able to come up with an affordable repayment plan.
- Repayment plans can last from three to five years, giving you much needed breathing room on the debt that you owe.
- You may be able to negotiate an amount to pay on the debt, and if the bankruptcy court approves the plan, the IRS will accept your payments in accordance with the new payment schedule.
- Bankruptcy proceedings can potentially help to reduce penalties and interest on your outstanding tax debt.
- If the IRS is attempting to collect on your tax debt by seizing your property or garnishing your wages, initiating bankruptcy proceedings may be sufficient to get the IRS to stop—at least temporarily.
At a minimum, if you owe money to the IRS and have no way to pay it back, it is time to start exploring your options. There are many potential solutions available that could help you get on the path to financial recovery. We encourage you to view our free guide, The Ultimate Survival Guide for IRS Problems or contact us today using our online contact form to learn how we can help.