Ask Terry Questions Bankruptcy and Federal Income Taxes

Bankruptcy and Federal Income Taxes

By Terry Savage on May 25, 2015 | Credit/Debt

Hi Terry,

What is your recommendation for professional assistance regarding unpaid federal income tax (large amount/multiple years) — I see commercials to have a ‘deal’ with the IRS, but don’t know if they are scams…

Also, can bankruptcy be used for discharge of federal or state tax debts? I do also have consumer debt,
accrued from long-term unemployment; my position was eliminated after 30+ years with the same employer. I have lost my condo thru foreclosure, but as yet have not filed for bankruptcy.

Thank you-

Terry Says:  OK, you definitely need to see an attorney who specializes in bankruptcies.  Be careful responding to advertisements.  The first appointment should be free.  And you might want to talk with more than one expert.   Ask about fees, timing, etc.

But at this stage, the answers should be pretty basic.  You can write off your consumer debt, but you will have to work out an agreement.  Here’s a direct link to the IRS Website page that will give you all the basic information about your options for taxes in bankruptcy.   You need this basic information before you see an attorney, so you know if they are suggesting impossible solutions to your tax situation in an attempt to drag out the process and get more fees from you.



a personal
finance question