How To Eliminate Your Tax Debt: ���Bankruptcy Solutions For Tax-Burdened Individuals

BURDENED BY OLD TAXES?

Presented by Markowitz O'Donnell, LLP  

Perhaps you are one of the people who have

been told by well-meaning friends and family

that you cannot get rid of taxes in bankruptcy.

While true in some cases, in

many cases it is not. You can

indeed eliminate tax debt

under certain circumstances

in bankruptcy.

 

In other circumstances

involving a single lump sum, you

can use bankruptcy to spread

that amount over a number

of years.

At the firm of Markowitz O’Donnell, LLP, we want you to know the truth about what bankruptcy can do for you when it comes to managing your tax debt.

In this presentation, we will discuss:

!  The timing involved in filing taxes

!  The timing involved in filing the bankruptcy petition itself

!  The need for careful exemption planning

!  Protecting a tax refund

When It Comes To Taxes, Time Does Matter

A primary consideration in eliminating taxes involves how old the taxes are.

 

The newer the taxes, the more unlikely it is you can eliminate them

(though you can use bankruptcy to break large sums into manageable

monthly payments).

 

As you might imagine the timing and age requirement for taxes can be

complicated and are addressed more exhaustively in our free white paper.

Delicate Timing Considerations Also Affect When You File Your Bankruptcy Petition

You will want to be very deliberate

about when you choose to file your

bankruptcy petition.

If you file your bankruptcy too soon,

for instance, you may be losing the

opportunity to eliminate thousands of

dollars in tax debt.

The Timing Of Your Petition Forms A Central Component of Your Bankruptcy Strategy

Not only does timing affect your ability

to eliminate and manage tax debt, it

also affects what assets you get to

keep.

The bankruptcy code allows you to

keep certain amounts and kinds of

property. These allowances are called

“exemptions.”

Proper exemption planning can make

the difference of thousands of dollars

in your case.

Why Does My Tax Refund Matter?

Believe it or not, the bankruptcy

trustee can indeed take your

tax refund.

Without careful exemption planning,

you can lose your tax refund to

a trustee.

Here again, timing can be a critical

issue in eliminating and managing

tax debt.

When Is A Trustee Not A Trustee?

In addition to careful

planning and timing, you also

want to consider the unique

local circumstances of

your case.

A primary consideration in any

bankruptcy case is the identity of the

bankruptcy trustee assigned to

your case.

Unlike a regular trustee, a bankruptcy

trustee actually gets paid a

commission out of what they can

collect from you. Different trustees

take different approaches to cases.

Often, an experienced bankruptcy

professional can help you understand

how a trustee can affect your

bankruptcy strategy.

Can I File Bankruptcy Myself?

Yes. You can.

Keep in mind, though, that what a

lawyer is really selling is his

experience. He has navigated these

waters before. He knows where the

hidden pitfalls are located.

You can use your case as an

opportunity to learn the law, but rarely

does everything go right on the first

try at doing anything, let alone a

bankruptcy with its critical timing and

financial calculations.

Tax Debt: Manage It – Eliminate It

Tax debt is not invincible. You do have options. Whether it is eliminating

old debt or managing a large current lump sum, bankruptcy may be able to

help you.

© 2015 by Markowitz O'Donnell, LLP. All Rights Reserved. Design and editorial services by FindLaw, part of Thomson Reuters.

Learn more about how bankruptcy can help you manage

and even eliminate your tax debt by downloading our free

white paper, How To Eliminate Your Tax Debt:

Bankruptcy Solutions For Tax-Burdened Individuals. You

can also visit us online.

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