Bankruptcy and Past Tax Obligations

Bankruptcy can provide a valuable tool for escaping staggering financial obligations that can deprive a family of its income via a wage garnishment, savings through a bank levy and assets by way of a property lien on real property.  Back taxes is one of the most difficult financial obligations families face because the IRS and state franchise tax board are brutal entities that show little mercy and have powerful weapons at their disposal to enforce unpaid tax obligations.  It is not uncommon for either federal or state tax authorities to use multiple enforcement tools simultaneously.  We have seen clients facing a wage garnishment, bank levy and real property tax liens simultaneously.  Many Kansas residents inquire about whether bankruptcy can provide relief from back taxes.

Attorney Weston R. Moore has been representing consumers seeking relief from staggering debt and oppressive debt enforcement efforts in Johnson County and throughout Kansas for over 15 years.  We are committed to carefully analyzing your complete financial situation so that we can provide the best possible advice and provide you with the full range of possible options.

The general rule is that most tax debts are non-dischargeable in bankruptcy, meaning that even after going through bankruptcy, you will still have to fulfill your tax obligations.  However, if certain criteria are met, income tax debts may be discharged.  First, the income tax debt must have come due earlier than three years prior to your bankruptcy filing.  Second, you must have timely filed accurate tax returns.

However, the knowledge that you may be able to discharge individual income tax debts is only part of what you need to know.  Individuals generally have two choices when seeking protection from creditors: Chapter 7, known as Liquidation, or Chapter 13, known as Debt Adjustment.  Both chapters of the Federal Bankruptcy Code offer specific advantages and disadvantages.  In Chapter 7, any tax debts that are non-dischargeable will still have to be satisfied after the bankruptcy proceeding.  Under Chapter 13, you may be able to organize a repayment plan that may make paying those non-dischargeable debts easier to pay.
The taxes you owe and chapter selection are merely a couple of the many issues that must be addressed if you are facing bankruptcy.  The complexity of bankruptcy treatment of past tax obligations demonstrates why choosing a law firm that takes the time to appreciate every aspect of your case is essential.  We know that honorable and responsible people often find themselves facing terrible financial alternatives and crushing debt.  Mr. Moore will carefully evaluate your situation including obligations that are more difficult to discharge in bankruptcy so that we can develop the best way to help you get back on the road to financial recovery. We are pleased to handle bankruptcy cases in Kansas and Missouri. We handle family law cases throughout Johnson County and surrounding counties in the Kansas City metropolitan area. Weekend and evening appointments are available. To reach our Olathe law office, call (913)782-7075, or contact us online.

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