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Morris Law Office
William A. Morris, P.C.
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Restructure Tax Debts in Chapter 13 BankruptcyMany taxes are not dischargeable in a Chapter 7 bankruptcy. However, in Chapter 13, your taxes can be restructured so that you avoid paying future penalties and high interest on the unpaid balance. This enables most people to get out from under their IRS debt within five years -- something that might not be possible if high interest and penalties were to continue to accrue. It also enables you to avoid IRS levies on your income and property. Besides stopping IRS levies and restructuring tax debts, you can save thousands of dollars in interest and penalties through a Chapter 13 bankruptcy in Colorado. If a tax lien is already in place, the IRS cannot renew the tax lien when it expires. Some income taxes can be avoided entirely in a Chapter 7 bankruptcy. Generally speaking -- and this is indeed a broad generalization -- income taxes that are three years old are dischargeable if the tax returns were filed on time. A detailed analysis of the tax situation is required to make this final determination. Did you know? You can keep your home in Chapter 7 bankruptcy but if you file a Chapter 13 instead you may be able to eliminate your second and even your third mortgage.
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