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Unpaid taxes |
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| The three most common types of taxes that most people pay are federal and state income taxes, personal property taxes, and real estate taxes. These taxes are all treated differently in a chapter 7 bankruptcy case and your bankruptcy lawyer is the best source of advice on this subject. The most important thing to remember when filing for bankruptcy is that your income tax returns must all be filed in order for your case to be successful. |
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| Incomes taxes owed to the federal government and to your state are known as unsecured priority debts and are not dischargeable unless certain circumstances exist. These certain circumstances generally involve how old the taxes are and whether or not you filed your tax returns on a timely basis. Generally speaking, income taxes must be at least 3 years old and have been filed at least 240 days prior to the bankruptcy filing in order to be dischargeable. |
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| Personal property taxes are also unsecured priority debts as are income taxes, but the rules for discharge are different. Personal property taxes can be discharged as long as they are at least one year old. Your affordable bankruptcy attorney will be able to tell you which taxes are dischargeable and which are not when preparing your case. |
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| Real estate taxes are secured debts and must be paid just like a mortgage loan must be paid if you wish to keep your house. If you don’t pay your real estate taxes, the town will place a tax lien on your home and eventually foreclose the lien. A tax lien foreclosure is a lawsuit against your ownership interest in the house which seeks to have your house sold so that the delinquent real estate taxes are paid. |
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| Taxes are very complicated and the information provided above is designed to give you a brief overview and understanding of how your taxes are handled when you file for chapter 7 bankruptcy. A bankruptcy attorney has special training, skill, and experience in dealing with these matters and your specific situation should be discussed during your free bankruptcy consultation. |
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