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Sacramento Tax Attorneys Understand Bankruptcy and Tax Debt

Submitted by admin on Thu, 3/19/2015 - 2:45 pm

Many people are confused about the specific debts that bankruptcy relieves. If a Sacramento tax attorney is required, it’s important to understand bankruptcy as it applies to tax debt relief. There are several ways to file bankruptcy, and in most cases filing will not relieve tax debt. However, there is information that should be known. In some cases, a bankruptcy can relieve your tax debt, but often not in full, and generally they still might be able to collect at a later date. TheBankruptcySite.Org explains:

“The moment you file a consumer bankruptcy, a mechanism called the “automatic stay,” or auto-stay, stalls most legal proceedings and prohibits your creditors from continuing collection efforts. This means creditors can’t sue, garnish, bill, or call you, or otherwise attempt to collect a debt you owe. The auto-stay applies to the IRS as well. While the automatic stay is in place, the IRS cannot send you collection notices, garnish your wages or bank accounts, or even offset your tax refund.”

Automatic stays are not the only element involved in the process. There are several methods of filing, and it often all depends on your own specific case. In many cases, an automatic stay may be limited to 30 days after you file if you have filed bankruptcies in the previous year. This is to prevent people from filing multiple bankruptcies in order to avoid tax debt. The limitations to filing bankruptcies in order to relieve tax debt are vast, and it’s important to know about your specific tax case before taking this next step.

The best way to assure a speedy and effective process is to seek a local tax attorney in Sacramento. A quality tax lawyer in Sacramento can offer advice and guidance throughout the entire process. While many people may choose to go forward with a bankruptcy on their own, it’s often a better choice to hire an outside source who is well versed on all matters of bankruptcy and tax debt. If a large sum is owed, bankruptcy can sometimes be the best choice for those wanting relief from the IRS.

 

(Source: Will Bankruptcy Spot the IRS From Collecting Tax Debts?)