With taxes soon to be due this year on April 18, 2011, a lot of consumers are faced with this question: I know I owe a lot of money to the Internal Revenue Service and/or California's Franchise Tax Board, and I know that it is non-dischargeable. How do I take care of it when I don't have any money to pay for it?
As discussed previously (See Discharging Taxes in Bankruptcy), older taxes are generally dischargeable in bankruptcy. However, this doesn't help you if you owe money for the 2008, 2009, or 2010 tax years to the IRS or FTB. There are several options available to you if you owe money for these tax years.
Personal Bankruptcy Attorney, Orlando Bankruptcy Attorney, Credit Card Bankruptcy,
Installment Payments
If you owe money to the IRS or FTB, but you do not have enough money to pay the entire amount at one time, one of the options available is to set up installment payments with the taxing authority. Be aware, this does not stop the penalties and interest from accruing on the amount of taxes owed. This just means that the taxing authority is allowing you to make installment payments. Both taxing authorities provide a maximum of 60 months (5 years) to pay off your tax liability. Offer-in-Compromise (OIC)
If you are currently unable to pay your tax liability, and you know you won't be able to pay in the near future, you may be eligible for an Offer in Compromise from the IRS and/or FTB. An OIC Program allows you to pay less than what you owe if you can prove that the offer is the best that you can do based on your circumstances. Everyone's situation is different, so the evaluation of whether you qualify for an OIC differs from person to person. Both the IRS and the FTB require the taxpayer to complete forms and return to them in order to be considered for the OIC Program.
Chapter 13 Bankruptcy
If you are unable to pay the taxing authorities the full amount of your tax liability, another option to consider is filing a Chapter 13 bankruptcy to pay off your debt through a Chapter 13 plan. Chapter 13s can last either 3 years (36 months) or 5 years (60 months). The bankruptcy option is a great idea especially if you owe other debt, such as unsecured debts like credit cards, medical bills and personal loans. You would need to pay 100% of the non-dischargeable portion of the tax liability because the taxing authorities are considered unsecured priority creditors, but unsecured creditors receive from 0% to 100% of their debt depending on your circumstances. One of the benefits of filing a Chapter 13 plan to pay your tax liability is the fact that only the actual tax liability is priority. Penalties and interest are not accrued on your account as you are paying off the debt in your Chapter 13 plan. This could potentially save you a lot of money! The penalties and interest are dischargeable and treated the same as all other unsecured creditors.
To determine if filing a Chapter 13 bankruptcy is the best option for you in your circumstances, it is advisable that you seek the advice of an experienced bankruptcy attorney in your region.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
Rating of Bankruptcy San Diego
Get Online Application at online Bankruptcy Lawyer.
0 comments:
Post a Comment