If you have a significant amount of income tax debt, you may be wondering if personal bankruptcy can help you. People often refer to tax debt as a type of debt that is entirely nondischargeable in an Oklahoma bankruptcy, but this is not always the case. Depending upon the amount of time that has passed from when you incurred the tax debt and when you ultimately file for bankruptcy, your tax debt could end up being dischargeable. To be clear, tax debt can be very difficult to discharge in bankruptcy, but it may not be impossible. What do you need to know about tax debt and consumer bankruptcy?
Tax Debt and the U.S. Bankruptcy Code
Under the U.S. Bankruptcy Code, there are “exceptions to discharge” when a consumer files for personal bankruptcy. In many cases, tax debt is one of these exceptions to discharge, which means that it cannot be discharged when a person files for Chapter 7 bankruptcy. However, as we mentioned above, in some situations it may be possible to have your tax debt discharged.
In order for your tax debt to remain eligible to be discharged in your Chapter 7 bankruptcy, all of the following must be true:
Keep in mind that you must meet all of the requirements above for tax debt to be dischargeable.
Contact an Oklahoma Bankruptcy Attorney
Determining whether your major debts are dischargeable can be one of the most important issues when you are deciding whether or not to file for personal bankruptcy. If the majority of your debts are not dischargeable, it may not make sense to file for Chapter 7 bankruptcy. An experienced Oklahoma bankruptcy attorney can assess your situations and discuss your options. Contact Deborah Brooks & Associates, P.C. for more information.