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Understanding What Bankruptcy Really Means


Discharging Taxes In Bankruptcy — 4 Vital Time Frames To Know

Getting your debts discharged through bankruptcy is not always easy. Unfortunately, getting taxes discharged can be even more complicated. For the best chances of success in receiving the debt relief you need from tax bills, you'll need to understand and stay within four basic time frames. What are these, and how can you ensure you abide by them? Here's what you need to know. 

1. The Tax Return Time Frame

In order to be eligible for inclusion in your bankruptcy case, the tax debt must come from a tax return that has been filed more than two years ago. To be considered as having been filed, you must have initiated the return or at least signed it if the IRS initiated it. 

2. The Tax Debt Time Frame

In addition to when the return was filed, the tax owed must have been due at least three years ago. The tax deadline is not the same as the filing date, so be careful to separate the two requirements. Each year's taxes are generally due by April 15 of the following year, barring extensions. Even if you paid the tax during the year (such as through withholding), it is not technically due in full until April. 

3. The Assessment Time Frame

A third component to the tax related deadlines is the notice of assessment. Filing a tax return is one step in having an actual tax bill, but it is followed by what is essentially an IRS 'bill'. This notice is a summary record of assessment deeming your tax bill due and payable.

This assessment comes after filing the taxes and generally after the due date of the return. It may also be delayed further by certain actions, including filing an amended return or making an offer in compromise. If you do not have this assessment, you can request copies to determine the date on record. 

4. The Lien Time Frame

The first three time frames mean you shouldn't act too early on tax debt bankruptcy. The final one, though, means you don't want to wait too long either. If the IRS progresses through the collections process to the point of filing a lien on any of your property (subjecting it to seizure as payment), the lien will not be automatically lifted if you get the debt discharged. If you are already facing IRS collections, then, you may need to act quickly to avoid this extra problem. 

Need to know more about these important time frames? Start by consulting with tax lawyer services in your area today. Together, you can create a plan to maximize your chances of getting discharge when and how you need it. 

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Understanding What Bankruptcy Really Means

When you begin making strides towards a healthier, more financially sound future, there are a lot of things that you can do to simplify the process for yourself. While paying down debt and working towards a simpler lifestyle can make a big difference, sometimes a bankruptcy is required to make things better. Bankruptcy will essentially clear the slate for you and your family, making it possible to move forward without worrying about heavy bills hanging over your head. On this helpful website, check out great tips and tricks that could make it possible to prevent problems in the long run, so that you can make things better.

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