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Tax Considerations After Bankruptcy

Tax Considerations After Bankruptcy

If you are overwhelmed with debt, you may be facing serious tax implications. The lack of sufficient funds may have caused you to fall behind on your taxes. Select an experienced attorney to help you climb out of debt and address your tax concerns.

At Redman Ludwig, P.C., we have more than 60 years of collective experience helping clients gain a fresh financial start. Our Indianapolis debt relief attorneys have the skills and legal resources to help you become debt-free, while addressing any tax implications. We are available to help you determine if filing for bankruptcy would help free up funds to cover your back taxes.

Every situation is unique. We will tailor our approach based on the most effective solution to help you become debt-free, while avoiding any unnecessary tax liabilities. Contact our law firm today to meet with a highly skilled debt settlement lawyer in Indianapolis.

Addressing the Tax Implications of Filing for Consumer Bankruptcy

Filing for consumer bankruptcy has fewer tax implications than other debt relief options. For example, if you negotiate a debt settlement plan with a lender, the Internal Revenue Service (IRS) will consider the reduction as income and will tax you on it. This is not the case when you file for bankruptcy. For example, if you owed money on a car loan and then filed for Chapter 7 bankruptcy, the car loan debt would be discharged, leaving you with no tax consequences.

However, nondischargeable taxes will not be wiped away through filing for bankruptcy. The IRS can collect back taxes up to 10 years, unless you signed something extending the time period. Our Indianapolis debt relief attorneys are committed to helping you avoid any further tax implications. We will evaluate your situation to identify ways we can effectively address your tax concerns such as:

  • Offers-in-compromise — If you are behind on your taxes, we can negotiate an offer-in-compromise with the IRS. The IRS is more likely to accept an offer-in-compromise if you realistically cannot pay the full amount due.
  • Payment plan — Our law firm's debt relief attorneys are highly skilled at working with the IRS to accept payment plans over a year or two. The IRS is more likely to accept a payment plan for smaller amounts of debt.

If you have not already filed for bankruptcy, we are available to help you determine if pursuing debt relief through Chapter 11 bankruptcy would be an effective solution to reduce your back taxes. Chapter 11 bankruptcy allows individuals to pay off their debts over 60 months with interest only. Every case is fact-specific. We are committed to helping you take appropriate action to address any tax ramifications.

Contact a Highly Skilled Columbus Bankruptcy Lawyer

To discuss your debt relief options, contact our law firm today to meet with a highly skilled Columbus bankruptcy attorney. We can help you find the best solution and take decisive action to regain your financial footing.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.