Will bankruptcy get rid of my tax debt? 23 Answers as of June 23, 2013

I owe over $10,000 in back taxes. If I file for bankruptcy, will those debts be excused? I accumulated the tax debt because I own my own business, but my son had several expensive medical problems over the last few years, and I couldn't afford to pay my taxes. I need to get rid of these debts. If I can't file for bankruptcy to eliminate my tax debt, can I take out a personal loan to pay off my taxes and then file bankruptcy to eliminate that loan?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Bankruptcy Law Center
Bankruptcy Law Center | Bill Zurinskas
Bankruptcy can discharge older income tax debt (I assume you are talking about income taxes) . If you filed bankruptcy today, income taxes owed for 2011, 2010, 2009, and 2008 are not dischargeable. Income taxes owed for 2007 might be dischargeable, assuming you filed the return timely on 4-15-08. 2007 or earlier income taxes may be dischargeable. Talk to an experienced bankruptcy attorney or CPA, since there are more several prerequiistes for the discharge of income taxes in bankurptcy.
Answer Applies to: Colorado
Replied: 9/22/2011
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Discharging taxes depends on how long you owe them and what kind of tax debt they are. If they are older than three years you may be able to discharge them but you should bring your tax debt to a good attorney for them to review to see if they qualify for discharge. You can take a loan to pay the taxes, which if that loan is unsecured than technically it would be dischargeable. However, you may have the creditor make a motion to find that debt non-dischargeable and survive the bankruptcy. You should talk to an attorney in your area for more details.
Answer Applies to: New York
Replied: 9/22/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
Most taxes are not discharged in bankruptcy. Some old taxes (for tax years more than 3 years prior to filing bankruptcy) can be discharged if you meet certain requirements. You cannot take out a personal loan to pay off my taxes and then file bankruptcy to eliminate that loan.
Answer Applies to: California
Replied: 9/21/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
See a competent bankruptcy attorney about the tax debt. Some taxes are dischargeable. take a copy of a "plain English transcript" to the meeting with the lawyer. You can get one from your local IRS office. It is bankruptcy fraud to take out a loan with the intent to discharge it, so don't do that.
Answer Applies to: California
Replied: 9/21/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Tax liability over 3yrs old is dischargeable.
Answer Applies to: Washington
Replied: 9/21/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Taking out a loan and immediately filing bankruptcy would be fraudulent. No that won't work. Some taxes over 3 years old may be dischargeable. You need a good lawyer to determine how to address taxes.
    Answer Applies to: Georgia
    Replied: 9/20/2011
    Heupel Law
    Heupel Law | Kevin Heupel
    Bankruptcy can eliminate tax debt, but it depends on the tax year and when you filed your taxes. Right now, taxes from 2007, 2006, and earlier are dischargeable assuming that you filed the tax returns more than two years ago.
    Answer Applies to: Colorado
    Replied: 9/20/2011
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    No, you cannot discharge debt taken on to pay taxes. You may be able to discharge some or all of the taxes if the returns were filed on time and the tax was due more than three years ago. There's another requirement I do not understand. Key here is the returns must have been timely filed.
    Answer Applies to: Colorado
    Replied: 9/20/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Among other things income taxes cannot be discharged unless they are at least 3 years old from the date assessed. Also taking a loan out knowing you are not going to pay the money back is fraudulent. I would not advise it.
    Answer Applies to: California
    Replied: 9/20/2011
    Braunstein Law, PC
    Braunstein Law, PC | Jacob Braunstein
    Generally, tax debt is non-dischargeable in bankruptcy. However, there are certain circumstances in which tax debt can be discharged. You will want to consult with a bankruptcy attorney regarding your situation to determine if the back-owed taxes are eligible to be discharged.
    Answer Applies to: Oregon
    Replied: 9/20/2011
    Tucker Legal Clinic
    Tucker Legal Clinic | Samuel Tucker
    You may discharge certain income taxes if you meet several conditions. Your plan to borrow for your debt and then discharge the unsecured debt would work, although done in bad faith. But if you have credit to borrow $10,000.00 unsecured, you should be clever enough to avoid bankruptcy. Consider a Chapter 13 to manage the tax problem.
    Answer Applies to: Mississippi
    Replied: 9/20/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    No to the elimination of the taxes. Taking out a loan with no intent to pay it back is fraud, so that may also have serious.
    Answer Applies to: California
    Replied: 9/20/2011
    Guardian Law Group PLLC
    Guardian Law Group PLLC | C. David Hester
    No to both. Taking out a loan with the intention of filing bankruptcy would be fraud. But you may be able to negotiate a settlement with the IRS. Contact them or have an attorneys office contact them to work towards a settlement.
    Answer Applies to: Utah
    Replied: 9/20/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    Strict and narrow conditions apply to exception to the rule that taxes are generally non-dischargeable. Ill-timing in filing the bankruptcy may be fatal. Counsels recommend to address the restrictions of 11 USC 507 and 11 USC 523 and order transcripts to verify tax history. Secondary sources online may be incomplete or misleading. As to taking out a personal loan to pay off non-dischargeable taxes, the answer is no. See 11 USC 523(a)(14). Love it or hate it, the Bankruptcy Code does anticipate loopholes. Furthermore, incurring debt without intention to repay it constitutes fraud and a basis for non-dischargeability.
    Answer Applies to: California
    Replied: 9/20/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    If you take a personal loan to pay off taxes and then file bankruptcy, the creditor may have the debt deemed non-dischargable if they are able to determine that is what you did. You cannot discharge priority tax debt in bankruptcy. Generally, recent tax debt will be priority debt. Income tax debt that is more than three years old may be non-priority and may be dischargable. You should talk to an experienced bankruptcy attorney to determine which debts, if any, can be discharged.
    Answer Applies to: Colorado
    Replied: 9/20/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    It all depends upon the tax years and the type of tax.
    Answer Applies to: California
    Replied: 9/20/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    Income taxes that last became due in the past 3 years are not dischargeable. What kind of taxes do you owe?
    Answer Applies to: Georgia
    Replied: 6/23/2013
    G. Anthony Yuthas & Assoc.
    G. Anthony Yuthas & Assoc. | Tony Yuthas
    You cannot write off the tax debt and to do what you suggest is bankruptcy fraud.
    Answer Applies to: Colorado
    Replied: 9/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Depends on a few factors.
    Answer Applies to: California
    Replied: 6/23/2013
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If the taxes are 1) income taxes, 2) you actually signed and filed a return for that year when the return was due, and 3) if the tax year was more than 3 years ago (currently tax year 2006 and 2007 after October 15, 2011) you should be able to discharge the taxes in bankruptcy. If not, then they are not dischargeable. If you get a loan to pay the taxes, that loan could be non-dischargeable as well as 1) you cannot obtain a loan to pay a non-dischargeable debt as that debt will also be non-dischargeable and 2) if you obtain a loan with no intention to repay the loan, that is a form of fraud and debts incurred by fraud are also non-dischargeable. You can file a Chapter 13 to repay the taxes if they are not dischargeable, you can set up a installment agreement or possibly an Offer In Compromise. You should consult with an attorney who does bankruptcy and tax debt resolution to find out what options are available to you.
    Answer Applies to: California
    Replied: 9/20/2011
    North Sound Law, PS
    North Sound Law, PS | Spencer Bergstedt
    The dischargeability of tax debt depends on a number of factors. If we're talking about your personal tax return, then, in order to be eligible for discharge, income tax debt must meet all five of the following rules: 1. The due date for filing a tax return is at least three years ago. 2. The tax return was filed at least two years ago. 3. The tax assessment is at least 240 days old. 4. The tax return was not fraudulent. 5. The taxpayer is not guilty of tax evasion.
    Answer Applies to: Washington
    Replied: 9/20/2011
    Law Office of Eric Ridley
    Law Office of Eric Ridley | Eric Ridley
    Taxes are complicated, and need a professional analysis which is beyond the space available here. In some cases, you can discharge IRS debt, and in others you will be unable to. You need to call a bankruptcy professional and get a free analysis of your situation.
    Answer Applies to: California
    Replied: 9/20/2011
Click to View More Answers:
12 3 4 Free Legal QuestionsConnect with a local attorney