Will My Tax Debt Be Dissolved in a Bankruptcy?

: Reese Baker & Associates

  Filed under: Taxes

tax debt dissolvedWhen most individuals are at the end of their rope with their financial situation they may have no other alternative but to think about going bankrupt. While many different types of debt can lead them into having to make this decision, often one of the major ones is their tax debt. What they may not be considering is that there are different types of tax debt and these are viewed differently in a bankruptcy.

Discharging Tax Debt?

In the case of income tax debt these can often be wiped out in a bankruptcy but there are some criteria that have to be met in order for that to happen. If there are tax liens in place these are classed as secured taxes and they are affiliated to you property. This is only applicable if this lien was recorded prior to the bankruptcy filing, and pertains to a Chapter 7 bankruptcy.

Property tax is a different tax and is handled differently depending on the circumstances. If you owed property tax before you applied for your bankruptcy then this may not get discharged in your proceedings. There are specific rules regarding this, and also State bankruptcy laws.

The best approach to your bankruptcy and trying to determine what debts will be resolved is to use the services of an expert like a Bryan bankruptcy lawyer. There are a lot of factors that must be considered in a bankruptcy and it is important to have the right expertise to rely on. Relying on the bankruptcy outcomes of others is not a good idea, as each bankruptcy case is unique and handled on its own merits.