Many people United States are facing huge IRS tax debt or state income tax debt, but simply do not have the means to pay it all right now, but could if they had time. We all know the IRS has the ability to go in any bank account with your Social Security number, regardless if you share it with another person and simply take the money out of your account to pay them back. This for most people can be financially devastating, you could miss a car payment, a mortgage payment or a student loan payment. Many other things could happen that that money was set aside for, such as fixing an automobile that you need to get to work and back.

Most people who think of bankruptcy, always think of chapter 7 bankruptcy, which is eliminating all your debts, but there is another much less utilized form of bankruptcy called chapter 13 bankruptcy. In chapter 13 bankruptcy you benefit from the automatic stay which stops all creditors collections, including the IRS from taking any collection actions against you and gives you a three to five-year length of time to pay back what you owe to the IRS or the Massachusetts DOR. No need to spend thousands of dollars on legal fees to have a lawyer negotiate a payment plan for you, that you may never get, with chapter 13 bankruptcy you are guaranteed a repayment plan for your IRS debt, as long as you can afford to pay it back.

Another benefit of chapter 13 bankruptcy is the possibility of discharging some of your IRS and state income tax tax obligations. There are very strict rules for who can apply for this, but it can be done. First of all the debts have to be over three years old and you must of filed a tax returns over two years ago to be even considered to have your income tax debt from the IRS or the Department of revenue eliminated through bankruptcy. Essentially the older the debt the more the bankruptcy court will allow to be eliminated through bankruptcy. So if you have many years of back tax obligations that you have not paid, and the IRS or the Department of revenue from the Commonwealth of Massachusetts is coming after you and levying your bank accounts, chapter 13 bankruptcy will fix this situation and even allow you to possibly eliminate match of your tax debt without repaying it.

Let’s also not forget the fact that if you have any unsecured debt that is holding you back, such as credit cards, medical bills or payday loans, chapter 13 bankruptcy can help you pay them back or even eliminate them without having to have them pay back. So not only can you fix your tax problems with the IRS and the Massachusetts Department of revenue, you can also eliminate unsecured debt in chapter 13 bankruptcy.

Less than 85% of all bankruptcy lawyers actually know how to utilize chapter 13 bankruptcy, so most of those lawyers out there that you know as friends or relatives, will most likely not have the experience to achieve what I’m explaining in this particular blog. You need the assistance of a very experienced bankruptcy lawyer who has handled chapter 13 bankruptcy cases and has expertise in these particular types of cases. Even though some of the paperwork is similar between chapter 7 bankruptcy and chapter 13 bankruptcy, what can be taken advantage of and the process is almost completely different for the two of these. It is critical that you contact an experience chapter 13 bankruptcy attorney, not simply a bankruptcy attorney.


Joseph F. Botelho, Esq.

Attorneys At Law

901 Eastern Ave.
Unit 2
Fall River, MA 02723

Office:  888-269-0688


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