Chapter 13 Bankruptcy Priority Tax Debts

Tax debts can be categorized under priority debts, it can turn out differently for you. In any case, you are more than likely to pay your taxes.  Whether it is priority tax debts or non-priority tax debt. The difference is the approach. The government rarely lets their tax defaulters go. There are provisions to ease the burden do exist in a few cases. Your tax debts may be declared non-priority by the court.  If so then you have a small chance of actually getting them discharged.  However, there are some important considerations regarding Chapter 13 bankruptcy priority tax debts.

Chapter 13 Bankruptcy Priority Tax Debts

All taxes are a priority for the Government. If the court deems your taxes a priority debt, there is no way this debt is ever going to be written off.  It becomes a part of the repayment plan and you will have to pay them. The idea is to make sure you pay, but somehow make it less burdensome than it would seem if you are forced to pay them all at once. Under a repayment plan, you have up to 5 years to clear them. So it shouldn’t really be difficult. One advantage with your taxes going into the priority basket is that the total amount that is set aside as non-priority debts will reduce, you might also be able to get a waiver for a large portion of them.

Priority taxes include:

• Taxes that are not eligible to be passed into the non-priority bracket

• Property taxes from within one year of the filing

• Payroll taxes that you were obligated to withhold

• Customs duties, excise taxes, employment taxes, and related penalties

Remember that it will tax time for you to pay up your debts through the repayment plan. However, having taxes continued to be levied is more expensive. A Fairfield bankruptcy lawyer can discuss your tax debt options with you for more  information.