How Can I Deal With Back Taxes During Bankruptcy? (Video)

How Can I Deal With Back Taxes During Bankruptcy? (Video)

Bill Kain explains back taxes and bankruptcy

Filing for bankruptcy can be a stressful process, especially when you have back taxes weighing you down. However, there’s a silver lining: as bankruptcy attorney Bill Kain explains, certain income tax obligations may be discharged in bankruptcy, whether you go with Chapter 7 or Chapter 13. The prospect of getting rid of some tax debt might come as a surprise to many, but it’s contingent on meeting specific requirements—one of the most crucial being how long ago the tax liability was assessed.


Surprisingly enough, some income tax obligations can be discharged in a bankruptcy, whether it’s a Chapter 7 or a Chapter 13. There are several requirements. The basic one is that it’s been a while since the tax liability was assessed. For most people, the taxes they owe are going to have to be paid. If you’re in a Chapter 7 bankruptcy case, there isn’t any mechanism or provision for payment of taxes in Chapter 7. In Chapter 13, however, you can pay your back taxes without penalty through a three-to-five-year repayment plan. Chapter 13 could be a very useful tool if you owe back taxes.

Contact a Bankruptcy Attorney Today

It’s essential to consult a bankruptcy attorney to understand which taxes can be discharged. Typically, income taxes that are several years old and for which you filed a timely and non-fraudulent tax return may qualify for discharge. In general, payroll taxes and penalties for fraud are not dischargeable. Knowing which taxes can be erased can provide a clearer picture of the financial relief bankruptcy may offer. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form for help to file for bankruptcy.

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