Can I Discharge Tax Debt in Chapter 13 Bankruptcy?
Unlike Chapter 7, Chapter 13 changed a great deal under the new Bankruptcy laws introduced in 2005. Pre-2005, you could discharge almost all taxes under Chapter 13 with what was called a “Super Discharge”. The only two rules that governed the “Super Discharge” were the Three Year Rule, and the 240 Day Rule.
After 2005, discharging taxes in Chapter 13 require a debtor to meet the same “Five Rules” as a Chapter 7; those “Five Rules” are:
- The Three Year Rule (507(A)(8)(A)(I))
- The Two Year Rule (523(A)(1)(B))
- The 240 Day Rule (507(A)(8)(A)(II))
- The Non-Fraudulent Return Rule (523(A)(1)(C))
- The No Tax Evasion Rule (523(A)(1)(B))
These rules, like many areas of the Bankruptcy Code are difficult to understand, which is why it is important to hire experienced attorneys who have handled many tax discharge cases in the past. Even when some taxes are not dischargeable, like priority claims, our attorneys may be able to discharge all interest and penalties. In many cases, the penalties and interests in a tax discharge case may equal up to thousands, if not tens of thousands of dollars.
Our Montgomery, Berks, and Chester County attorneys have even successfully argued down the amount of taxes owed in Bankruptcy Court, by establishing flaws and miscalculations in clients’ tax history.
Contact Our Montgomery, Chester, and Berks County Bankruptcy Attorneys Today
Our attorneys are ready to discuss your concerns and provide answers. Our attorneys represent clients in Phoenixville, King of Prussia, Exton, Reading and the surrounding areas.