Bankruptcy Analysis: A Path to Debt Relief
What Is Bankruptcy?
Bankruptcy is a legal process that allows individuals and businesses to eliminate or repay their debts under the protection of the federal bankruptcy court. It provides a fresh financial start by restructuring debts or selling assets to pay off creditors.
Types Of Bankruptcy
Chapter 7 bankruptcy liquidation: Often called a fresh start, bankruptcy Chapter 7 involves the liquidation of non-exempt assets to pay off creditors. Most unsecured debts like credit card debt, and medical bills can be discharged. However, not everyone qualifies for Chapter 7.
Chapter 13 Bankruptcy (Reorganization): This type allows individuals with a regular income to create a court approved plan to repay all or part of their debts over three to five years. It’s suitable for those with a steady income who want to protect their assets.
Chapter 11 Bankruptcy (Reorganization for Businesses): Primarily used by businesses, chapter 11 provides a way to reorganize and continue operations while repaying debts. It’s a complex process that requires court approval.
Back Taxes and Bankruptcy
Bankruptcy can not discharge all types of tax obligations. Payroll taxes, trust fund taxes can’t be discharged in bankruptcy. Mostly, old income unpaid taxes may qualify to be discharged but there are specific criteria, including the age of the debt and whether you filed a return. It is often quite difficult to get debt relief through bankruptcy. Hence, it is recommended to consult a tax professional who will help you throughout the process.
How LifeBackTax Relief Can Help
Navigating bankruptcy laws and making the right choices can be complex. At LifeBack Tax Relief, we have the expertise to guide you through bankruptcy analysis, helping you understand your options and providing support throughout the process. Our team can help you make informed decisions to achieve the debt relief you need.
We will calculate which years are eligible to be discharged in bankruptcy. Most bankruptcy attorneys lack this knowledge, or have little knowledge in this area. Most taxpayers are still left with outstanding back taxes after the bankruptcy has been discharged, not to mention that extended the Collection Status of Expiration (CSED) date for the taxpayer and added interest and penalties for the duration of the bankruptcy.
Contact us today for a FREE consultation to explore your options and take control of your financial future.
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