Tax Issues and Bankruptcy Filings
Don't forget about short- and long-term tax issues when considering bankruptcy.
Our Framingham, Massachusetts, law office is led by seasoned attorney Thomas G. Waldstein. In addition to having more than three decades of legal experience to his name, Mr. Waldstein has an advanced legal degree in taxation. Our law office does not handle tax problems, however, except in relation to bankruptcy.
Unpaid Income Taxes and Bankruptcy
Usually, unpaid income taxes are not dischargeable in either Chapter 7 or Chapter 13 bankruptcy. If you owe income taxes to the IRS or a state tax authority, those debts will remain intact even after other debts are discharged through bankruptcy.
There are, however, exceptions. Older unpaid income taxes may be dischargeable in bankruptcy - if you have properly filed your tax returns but not paid the income tax assessment. These bankruptcy regulations can be complex - we encourage you to consult an experienced bankruptcy lawyer for advice if you have unpaid income taxes you are hoping to discharge with a bankruptcy petition.
Tax Consequences of Home Foreclosure and Bankruptcy
Many of our clients use bankruptcy as a way to get out of an unmanageable mortgage or to stop a home foreclosure by reorganizing their debt repayments. If you are facing foreclosure, it is extremely important to understand the possible tax consequences associated with foreclosure.
Bankruptcy rules have improved recently - to provide more protection to homeowners who lose their homes to foreclosure. In the past, if you owed $150,000 on your mortgage and it sold for only $100,000 at a foreclosure auction, you would owe taxes on the $50,000 difference (also called forgiveness of debt income). Now, under the bankruptcy rules, the tax on that $50,000 may be discharged via bankruptcy.
Schedule a Confidential and Free Initial Consultation
If you have questions about the tax consequences of bankruptcy, we encourage you to schedule a confidential appointment with Framingham attorney Thomas G. Waldstein. To make an appointment, call 508-872-6567 or send us an e-mail.
We are a debt relief agency. We help people file for relief under the Bankruptcy Code.
