Bankruptcy and Tax Debt

Bankruptcy and Tax Debt

Contrary to popular belief, tax debt is dischargeable in Chapter 7 or Chapter 13 bankruptcy, although only a very specific set of circumstances. Even where it is not dischargeable, it can be repaid at 0% interest over 3-5 years in a Chapter 13 bankruptcy.

If you have deficient IRS or State of Michigan—or other state—personal income tax owing and you are unable to repay it with your current income, a Chapter 7 or Chapter 13 bankruptcy may be well worth considering.

The Hilla Law Firm, PLLC is experienced with determining whether your tax debt is indeed dischargeable in bankruptcy and is experienced in communicating with the IRS and the State of Michigan Department of Treasury in order to make this determination. We are likewise  experienced in constructing Chapter 13 payment plans designed to alleviate your tax debt at no interest over the course of the Chapter 13 plan at a monthly rate that you can afford to pay.

There are, however, types of tax debt other than income tax that are not dischargeable at all, and there are individual circumstances in which the tax debt is too great to realistically pay off over the maximum 60-month length of a Chapter 13 Plan.

If you have a tax debt that you are unable to manage directly and are threatened with the possibility of having a tax lien placed on your property, having a property seized for taxes owed, property or businesses placed into receivership, it may benefit you to contact The Hilla Law Firm for a free, initial consultation so that we can examine your circumstances carefully together and determine whether a bankruptcy may actually be your best, not last, course of action.

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