Tax Debt and Bankruptcy

Tax debts can cause serious consequences if not resolved properly. Unpaid taxes can quickly lead to other hassles, such as property liens and wage garnishment. While filing for bankruptcy, can halt garnishment and lien orders; not all tax debts can be resolved in bankruptcy. When you file for bankruptcy for unpaid taxes, you need to determine whether the bankruptcy court will consider the case.

When to File for Bankruptcy for Unpaid Taxes

If you are in the middle of a tax audit or if you cannot make a tax payment, then bankruptcy can be an option. In some cases, the tax debt will have to be discharged in the bankruptcy case. In other cases, the court may consider the debt but allow you to pay it over time. You may need to obtain a payment plan from the court and follow it. This should be done when you file for bankruptcy.

The Benefits of Filing for Bankruptcy for Unpaid Taxes

One of the benefits of filing for bankruptcy for unpaid taxes is that the taxes will not be included in the bankruptcy. Even if the bankruptcy court does not discharge the taxes, you will not be responsible for them in the future. You will be able to keep the property that is not exempt and you will be able to keep the property that you purchase after you file for bankruptcy.

Tax filing deadline is May 15, 2021. If you have unpaid taxes from previous years or are concerned about not being able to pay your 2020 taxes this month, contact our Houston bankruptcy lawyer office today.