Columbus Bankruptcy Advice
What happens to my tax debts?
When filing bankruptcy in Ohio, what happens to my tax debts? The answer to this question depends on the type of tax debt involved, when that tax was due, and whether you file a Chapter 7 or Chapter 13 bankruptcy. The most common type of tax debt is for unpaid income taxes, often from having too little tax withheld from your paycheck or forgetting to make quarterly estimated tax payments when due.
If you owe income tax for a prior tax year for which the return was due less than three years before you file bankruptcy or if the tax was assessed less than 240 days before you file bankruptcy, that tax debt is entitled to priority status. Priority means that it gets paid before certain other creditors. In a Chapter 13, you’ll have to repay your priority tax debts in full during the course of the plan; in a Chapter 7, any distribution to creditors will be paid in the order of priority.
Bankruptcy Advice in Columbus
Tax debts that are entitled to priority are not dischargeable in bankruptcy, which means you will still owe them after your case is closed (unless they were paid in full during your bankruptcy.) Some debts for income tax are nondischargeable even if they are not entitled to priority.
For example, if you never filed a tax return (and were required to do so), if you filed a fraudulent return, or if you otherwise attempted to evade your tax liability, such tax debts are not dischargeable. If you borrow money to pay off a nondischargeable tax, that loan is also nondischargeable.
Different rules apply to other types of tax liabilities, so contact Cupps & Garrison, experienced bankruptcy attorneys in Columbus, Ohio, for more information.
Bankruptcy Frequently Asked Questions:
Do I have to go to court if I file bankruptcy?
What happens to my credit after filing bankruptcy?
What happens to my tax debts?
Contact Us Today
To speak with a bankruptcy attorney, please contact our law office in Columbus Ohio, call 614-441-8603, or fill out our online contact form.
When filing bankruptcy in Ohio, what happens to my tax debts? The answer to this question depends on the type of tax debt involved, when that tax was due, and whether you file a Chapter 7 or Chapter 13 bankruptcy. The most common type of tax debt is for unpaid income taxes, often from having too little tax withheld from your paycheck or forgetting to make quarterly estimated tax payments when due.
If you owe income tax for a prior tax year for which the return was due less than three years before you file bankruptcy or if the tax was assessed less than 240 days before you file bankruptcy, that tax debt is entitled to priority status. Priority means that it gets paid before certain other creditors. In a Chapter 13, you’ll have to repay your priority tax debts in full during the course of the plan; in a Chapter 7, any distribution to creditors will be paid in the order of priority.
Bankruptcy Advice in Columbus
Tax debts that are entitled to priority are not dischargeable in bankruptcy, which means you will still owe them after your case is closed (unless they were paid in full during your bankruptcy.) Some debts for income tax are nondischargeable even if they are not entitled to priority.
For example, if you never filed a tax return (and were required to do so), if you filed a fraudulent return, or if you otherwise attempted to evade your tax liability, such tax debts are not dischargeable. If you borrow money to pay off a nondischargeable tax, that loan is also nondischargeable.
Different rules apply to other types of tax liabilities, so contact Cupps & Garrison, experienced bankruptcy attorneys in Columbus, Ohio, for more information.
Bankruptcy Frequently Asked Questions:
Do I have to go to court if I file bankruptcy?
What happens to my credit after filing bankruptcy?
What happens to my tax debts?
Contact Us Today
To speak with a bankruptcy attorney, please contact our law office in Columbus Ohio, call 614-441-8603, or fill out our online contact form.
Cupps & Garrison, LLC is a Debt Relief Agency. We assist people file for
bankruptcy relief under the United States Bankruptcy Code.
bankruptcy relief under the United States Bankruptcy Code.
