Eliminating tax debt through a bankruptcy filing sounds ideal to a lot of people struggling with their finances. Bankruptcy laws in Arizona allow for some types of tax debt to be discharged, but not all. If you find that your tax debt is not dischargeable, do not despair. You still have options.
When you file for bankruptcy, even if your goal is not eliminating tax debt, you will have an automatic stay on all debt collections. This means your creditors will not be able to force you to do anything with your debts while the proceedings take place. Bankruptcy laws in Arizona allow for this, so you can expect it to happen without fail.
This means that you are able to get a break from the roller coaster of trying to figure out how to pay off debts – even if you are still left with tax debts that cannot be cleared through bankruptcy discharge, just having a breather from dealing with debt may be enough to help you organize your finances and find a way to deal with those outstanding debts later on.
With a Chapter 7 bankruptcy filing all of your dischargeable debts will be dealt with by the end of the process. Again, this may give you the financial freedom you need to save up the funds to pay off the non-dischargeable debts, and/or the time required to come up with a plan to do so.
A Chapter 13 repayment plan deals with more types of debt than a Chapter 7 but may still leave you with debts such as student loans or child support that cannot be handled through bankruptcy discharge. Like a Chapter 7 situation, having most of your debt discharged can give you what you need to get the rest dealt with on your own.
A lawyer experienced in bankruptcy laws in Arizona, and using bankruptcy for eliminating tax debt, will be your greatest asset in this situation. An attorney can help you find the best path to deal with your debt – all of it, whether it is considered dischargeable or not. Coming up with a plan for eliminating tax debt through bankruptcy and other means is the first step toward financial freedom, and it is something an attorney will be very helpful in accomplishing. Talk to a qualified bankruptcy lawyer about your debt and how to deal with it.
Disclaimer
This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.