The Huggins Law Firm, PA
Call to Schedule a Free Consultation
Columbia 803-764-1558 Charleston 843-509-0039

Eliminating tax debt through bankruptcy in South Carolina

If someone has been struggling to pay back creditors, it is quite possible that they also have unpaid tax debt. Generally, tax debt is not eligible for discharge with bankruptcy; however, there are some circumstances where it is possible. Being able to eliminate this type of debt is most likely with a Chapter 7 filing because Chapter 13 is a reorganization of debt and involves a repayment plan.

There are a variety of qualifications that someone must meet for their tax debt to be able to be eliminated with a bankruptcy filing. The debt must be at least three years old, must have been for income taxes and not payroll taxes or fraud penalties, and the person must have filed a tax return.

Additionally, the IRS must have assessed the debt at least 240 days before the bankruptcy filing, and the debtor must not have committed or attempted to commit fraud or tax evasion. If these requirements are met, the outstanding tax payments and penalties for unpaid taxes may be discharged, and at that point, the IRS is no longer legally able to garnish someone's wages or bank accounts in an attempt to recover the unpaid taxes.

Filing for personal bankruptcy can enable someone to get out from under a variety of unsecured debts; however, as noted, not all debts are eligible for discharge. Additionally, people must meet certain requirements before they are able to file for bankruptcy. An attorney may be able to explain what the differences between types of bankruptcies and could explain what to expect throughout the process.

No Comments

Leave a comment
Comment Information

The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
Suite 201
Columbia, SC 29201

Phone: 803-764-1558
Fax: 803-764-1563
Columbia Bankruptcy Office

Columbia Office

Charleston Office
925-D Wappoo Road
Charleston, SC 29407

Phone: 843-509-0039
Fax: 866-481-2325
Map & Directions

Charleston Office