There may be many scenarios in which tax obligations might prove significantly higher than expected and facing similar forms of debt can be a harrowing experience. Individuals in Georgia who encounter issues with overdue tax debts and worry that they will struggle to manage these obligations may have questions about whether such debts are eligible for discharge via bankruptcy. While bankruptcy could help provide relief from tax debts in certain scenarios, this might not always be a viable path in every situation.
Tax debts in bankruptcy
According to experts, there may be numerous requirements for pursuing relief from tax debts via similar paths. For instance, debt from income taxes may be the only type of tax debt eligible for discharge in bankruptcy and there are also requirements regarding how old tax debts must be before they become eligible for discharge. However, some forms of tax debt, such as tax liens, might not be dischargeable and the presence of such concerns could even affect one’s ability to seek relief via similar means.
Experts also indicate that a reorganization plan via Chapter 13 Bankruptcy could also be a viable option at times. This process may allow debtors to repay portions of debt over a set period and any debts that remain when the payment plan is complete may be discharged, if eligible. However, the same types of requirements may still apply and this process might not provide any relief from newer tax debts.
What are the options?
While there may be some situations in which bankruptcy could help provide relief from tax debts, this might not always be the only option to consider. Options such as an Offer in Compromise or the IRS Fresh Start program are just two examples of paths that could help provide much-needed relief from similar concerns. Individuals in Georgia who struggle with high tax debts and remain uncertain of their options could benefit from speaking with an attorney for advice in evaluating their situations and determining the best course of action to take to safeguard their financial futures.