Stopping Collection Attempts From the IRS Through Bankruptcy
It seems like everyone has an opinion about Chapter 7 bankruptcy - and they're all too willing to share it with you. From gut-wrenching assertions that you'll lose your house to fear-inducing statements about the black mark it will leave on your credit score forever, there's no denying that these opinions create an aura of fear, uncertainty and stress regarding filing Chapter 7 bankruptcy.
Fortunately, many of these negative opinions are blatant myths - and if you're buying into them, they could be costing you the opportunity to get the debt relief you need.
Myths About Chapter 7 Bankruptcy
With that in mind, let's take a look at the five biggest myths about Chapter 7 bankruptcy:
Collection attempts from the IRS may stop temporarily when bankruptcy is filed but it may vary in different situations. It depends on what chapter of bankruptcy you file and what tax issues you are dealing with. Bankruptcy has the potential to help you resolve tax issues and even if you're not able to get your debt discharged, you may get additional time to pay what is owed.
When you file bankruptcy the automatic stay goes into effect. This keeps creditors from trying to collect from you during the filing process. In some cases, a creditor may try to collect outside of the stay but they need permission from the court in order to do so. The stay remains in effect until the debt is discharged or the stay gets removed by the court.
Many consumers are under the impression that tax debt can't be discharged but this isn't completely true. Certain tax debt may be dischargeable but it depends on the circumstances. Tax debt may be eligible for discharge if the tax is older debt that has been assessed by the IRS at least 240 days before filing, you have income tax returns filed for the last 2 years and the debt was due at least 3 years prior.
Each chapter has eligibility that must be met in order to settle tax debt. If your debt is not dischargeable under Chapter 7 bankruptcy, Chapter 13 bankruptcy allows you to make payments with a repayment plan and as long as you abide by the schedule of the plan the IRS won't pursue collection with the automatic stay in effect.
Are You Considering Bankruptcy? We Can Help
If you are considering bankruptcy and need an expert to talk to, you are always welcome to contact
the bankruptcy attorneys at Allmand law Firm PLLC.