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Bankruptcy and Tax Debt in Hayward, California

Are you one of the millions of people who owe money to the Internal Revenue Service or the California Franchise Tax Board? If so, you may be living in fear of a potential wage garnishment or tax lien. Many people who are unable to pay their taxes feel helpless; however, bankruptcy is a solution that may be able to wipe away some or all of your tax debt.

According to Forbes, about 8.2 percent of Americans were delinquent on their federal taxes. However, this statistic does not take into account taxes owed to the California state government. Although California has a graduated income tax system that allows persons with less income to pay less in taxes, California still has one of the highest income tax rates of any state. For Hayward residents who have tax debt because they have lost their jobs or have had unexpected expense such as a medical emergency, it is important to remember that bankruptcy is an option.

Eliminating Tax Debt in Chapter 7 Bankruptcy

It is possible to eliminate tax debt in Chapter 7 Bankruptcy. However, several requirements must be met:

 1.  The tax debt must be from unpaid income taxes – other types of tax debt cannot be eliminated in Chapter 7         Bankruptcy.

2.  There must have been no willful fraud or evasion – if you filed a fraudulent income tax return, you will be     unable to eliminated the tax debt.

  3.  The taxes must have been due at least three years ago – taxes can only be eliminated in Chapter 7 if the return was due at least three years before the debtor filed for bankruptcy.

  4.  The tax return must have been filed at least two years ago – taxes can only be eliminated if a return was signed and filed with the IRS at least two years before filing for bankruptcy.

  5.  The tax assessment must have been at least 240 days ago – the assessment of tax liability against you must have taken place at least 240 days before filing for bankruptcy.

If you meet the above five requirements, it is likely that you will be able to eliminate any income tax debt in Chapter 7 Bankruptcy. It is important to note that this does not include secured debts, such as a tax lien.

Tax Debt in Chapter 13 Bankruptcy

Filing for Chapter 13 Bankruptcy is also an option for many people who live in Hayward. In Chapter 13 Bankruptcy, the debtor proposes a three-year or five-year payment plan to repay some or all debts. After the payment plan is over, any remaining unsecured debt is wiped away. If you have a large amount of tax debt, a Chapter 13 Bankruptcy payment plan may give you the time you need to pay off the debt. Any income tax debt you owe after successfully completing the payment plan would be wiped away.

Contact the Law Offices of Melanie Tavare

We have years of experience helping members of the Hayward community with their debts, including tax debt. If you owe money to the IRS or Franchise Tax Board, contact the Law Offices of Melanie Tavare by calling us at 510-255-4646 or contacting us online.


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"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."


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"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."