If you are thinking of filing Chapter 7 bankruptcy debts for past due income taxes can be allocated. Before sending the file, you need to understand what will happen to your income tax when you file Chapter 7.
Taxes on income and debt can not be discharged in a Chapter 7 bankruptcy, if:
the tax return is filed in less than three years before the declaration of bankruptcy;
Or the taxes assessed within 240 days after the petition.
There areadditional exceptions for cases of fraud and an end to tax filings, so that if you have done these questions then your lawyer must take a further look at your situation.
An additional wrinkle arises when the tax authorities, a lien for unpaid taxes filed. Even if the underlying tax debt can be wiped out in Chapter 7 bankruptcy, the bond itself remains in force. If you do not have non-exempt property at the time of your Chapter 7 case is filed, you're in the clear.
ButWhat happens if a house with non-exempt equity if the file for Chapter 7 bankruptcy? In this case, the IRS will tie into your home until you sell or refinance. Have at this time, you should pay the lien in order to bring to the transaction.
Of course, if you have no immediate plans to sell or refinance, you can be clear. Why? Since the tax privileges expire after 10 years, if not renewed.
So if you plan to stay put for more than 10 years(and the tax authority is not renewed), the privilege may be able to close completely download the necessary requirements to pay their tax liabilities.
