Is Chapter 13 the best way to exterminate my IRS taxes?
Yes! In a Chapter 13 bankruptcy, we can help you pay back any non-dischargeable IRS debt at 0 percent interest over a five-year period through a “Wage-Earner’s Plan.” That is a huge advantage to you if you have a large outstanding IRS obligation. It will also stop all penalties and interest from accruing further on any IRS debt you are obligated to pay back.
For example, if you owe $20,000 to the IRS and they are charging you almost 20 percent APR interest and penalties, that is costing you $4,000/year — or roughly $330/month that you are being charged in interest alone. However, if you file a Chapter 13 bankruptcy and pay the IRS through the Chapter 13 plan, you can pay that $20,000 back over the next five years at 0 percent interest and penalty free. What that means is that you will pay back the IRS at approximately $333/month over a five-year period, and all of that will go toward the principal balance, not interest.
Sometimes you can discharge IRS debt through a Bankruptcy.
It has been our experience that problems will arise unless you deal directly with the IRS from the outset. If your tax returns have been on file for more than three years, and your case falls within the exception of the general rule that taxes are non-dischargeable, then it is important to specifically notify the IRS that the taxes have been discharged. Otherwise, the IRS typically takes the position that they were never discharged.
Accordingly, our attorneys may be able to assist you in discharging the taxes through an adversarial proceeding if you are in a Chapter 7 bankruptcy and obtain a Federal Court Order advising the IRS that your taxes have been discharged. If your case falls within the general rule and you are in a Chapter 13 bankruptcy, then such taxes should be discharged through the bankruptcy.
Contact Pelley Law Office, L.L.P., Today
We invite you to call us at 972-608-0335 to schedule a free confidential consultation with an experienced bankruptcy lawyer. You can also contact us by email now to request an appointment to discuss your options. You will be under no obligation to hire us. We look forward to speaking with you free of charge and explaining how we can help.