COMPREHENSIVE BANKRUPTCY TAX PROTECTION
Bankruptcy law overrides local and state and federal tax law to allow for the modification of all types of Town, State and Federal taxes. Some types of taxes are eligible for complete elimination without payment in bankruptcy; all types of taxes are subject to alteration. The Federal Bankruptcy Code controls local, State and Federal tax laws. Every possible tax problem is subject to the jurisdiction of the Bankruptcy Court and the overriding Federal protections for all tax debt under the United States Bankruptcy Code. This means that tax problems of all kinds that can’t be fixed under normal tax law are all subject to additional taxpayer protections under Bankruptcy law.
All the collections cease with the filing of a petition in bankruptcy under any chapter producing an automatic stay that is created against all creditors, including tax collectors, immediately stopping all local, State and Federal tax actions to:
- Wage Garnishments
- Liens or levies
The automatic stay provides the necessary time to protect yourself from further detriment and allow the breathing room to create a plan to reduce, eliminate or affordably repay any types of tax obligation.
Finding a Bankruptcy Chapter to Fit Your Tax Needs
There are actually 4 possible bankruptcy chapters and finding the right one for your tax needs requires expert legal counsel.
- Chapter 7
- Chapter 13
- Chapter 11
- Chapter 20
Chapter 7 Bankruptcy Tax Relief
All taxes and tax “collection actions” are stopped by the automatic stay under Chapter 7.
- Personal Property Taxes: All taxes on cars, boats, personal belongings, and equipment can be discharged or extinguished in full if they are over one year old on the date of filing.
- State and Federal Income Taxes: Income taxes can be discharged or extinguished if they are over three years old, have been filed for two years, and haven’t been assessed within 270 days of the date of filing.
Chapter 13 Bankruptcy Tax Relief
- Personal Property Taxes: Taxes on personal property that are over one year old on the date of filing can be eliminated entirely, including all penalties and interest. Personal property taxes that are less than one year old can be repaid over three to five years without further penalties or late fees. This includes automobile taxes and all taxes on personal belongings.
- Real Estate Taxes: Under Chapter 13, all real estate collection actions are automatically subject to an automatic stay. All taxes can then be repaid over a three-to-five-year reorganization plan subject to statutory interest rates. Under-secured real estate tax liens can be reduced.
- State Income Taxes: These taxes can be eliminated if they meet the basic three-prong test for Chapter 7 and 13 dischargeability, including interest, penalties and late fees. More recent taxes are fully subject to repayment over three to five years at a reduced interest rate under a favorable plan of principal reduction.
- State Sales Taxes: These trust fund taxes are fully subject to the automatic stay and repayment at favorable rates over three to five years without further penalties. This allows trust fund tax assessments against business owners to be repaid without loss of assets or termination of the business.
- State Payroll Taxes: These trust fund taxes are subject to favorable repayment plans over three to five years with an automatic stay against all collection actions by State Revenue Officers for unpaid state payroll taxes.
- Federal Income Taxes: These taxes can be discharged or eliminated if they are over three years old with the return having been filed for more than two years with no assessment within 270 days of the Chapter 13 filing. This includes the elimination of all applicable interest, penalties and late fees. All other non-extinguished Federal income taxes can be repaid at reduced statutory interest rates without further penalty over a three-to-five-year Chapter 13 Plan of Reorganization.
- Federal Trust Fund Payroll Taxes: All collection actions for trust fund payroll taxes are subject to the automatic stay of Chapter 13. Repayment of trust fund personally assessed payroll taxes can be repaid at favorable rates without further penalties or late fees over a three-to-five-year repayment plan based upon personal income and expenses. This offer allows for the repayment of personally assessed business taxes while allowing the business to continue future operations.
Chapter 11 Bankruptcy Tax Relief
Chapter 11 tax relief is available to all individuals and businesses of any size. All collection actions are stopped by Federal Court Order – no consent of local, State or Federal tax collectors is required. We can help you understand how various tax debts are treated and discharged in Chapter 11 such as:
- Individual State and Federal Income Taxes: are subject to dischargeability/elimination for older qualifying taxes and repayment of recent taxes at favorable rates without further penalties or late fees over a five-year period.
- State and Federal Payroll Taxes: are subject to the automatic stay of Chapter 11 and payable over a five-year period at reduced interest rates without penalties or further late fees by right. These “unimpaired” tax repayment schedules do not require the vote or consent of the applicable tax authorities.
- State Sales Taxes: are subject to favorable repayment terms over time in accordance with the petitioner’s available income over expenses. This allows businesses to remain open while repaying taxes at favorable terms and interest rates without further penalties or late fees.
- All Other taxes: are subject to elimination or repayment under the terms of Chapter 11 protection. This includes local business and equipment taxes as well as Town real estate taxes.
Regardless of the size of your personal or business tax problem, Chapter 11 can provide full comprehensive relief for personal and business taxes of all types to all Federal, State, and local taxing authorities without consent, without exception.
Chapter 20 Bankruptcy Tax Relief
The filing of Chapter 7 followed by the later filing of a Chapter 13 Bankruptcy petition is known as a “Chapter 20.” This is a powerful and creative use of two Chapters of Bankruptcy to provide individuals with the fullest protection available for the greatest tax debt relief possible under both Chapters of Bankruptcy protection.
The key to Chapter 20 success starts with the proper preparations of Chapter 7 eligible case under the more stringent income requirements of the new Bankruptcy law. By utilizing every method possible to qualify debtors under Chapter 7’s, including full application of the “means testing” requirements, the experienced counsel at the Law Offices of Neil Crane, LLC can provide full discharge of all Chapter 7 dischargeable taxes as the first step to debt relief and later qualification for Chapter 13.
By obtaining a properly ordered Chapter 7 discharge and unsecured debt relief, our experienced bankruptcy attorneys can help clients to drastically reduce tax debt of all kinds and free all income available to be used to pay the non-dischargeable tax debt and other priority debt instead of the less important types of debt already extinguished in the earlier-granted Chapter 7 proceeding. This allows us to use a subsequent Chapter 13 to focus all of our client’s income and ability toward the most important remaining tax obligations, free of the constraints of other discharged obligations.
Through the creative use of a Chapter 7 Discharge and the proper preparation of a precisely-crafted Chapter 13 Plan, we can provide our clients with the best avenue possible for long-term tax relief and overall financial success.
At the Law Offices of Neil Crane, LLC, the filing of Chapter 20 Bankruptcy proceedings has been a staple of our practice’s success for over three decades. Our office is the leading provider of Chapter 20 relief for tax relief and tax repayment problems. This sequential use of two chapters of relief requires the expertise built over thousands of successful cases that have provided the customized and comprehensive tax solutions even in the face of all forms of overwhelming tax debt problems.
Tax Lien Removal
At the Law offices of Neil Crane, LLC we know how to utilize bankruptcy protection under Chapter 7, 11, and 13 to prevent and also remove tax liens, levies, garnishments, and seizures against personal or business assets. We have been successfully utilizing bankruptcy law to protect taxpayers from all types of governmental attachments and sales since 1983.
In addition to the protection from future collection procedures as provided by the automatic stay, liens and other severe collection remedies can be reversed and undone in the Bankruptcy system.
Liens placed on real estate are subject to removal under Chapter 13 and Chapter 11 lien-stripping provisions. Various provisions of the Bankruptcy Code allow bankrupt taxpayers to remove tax liens that are under or unsecured. This allows liens to be removed from personal property, real estate, and business property to the extent that the collateral with the lien provides no value or equity for the tax levying authority. Once removed, these tax obligations are subject to discharge/elimination or favorable repayment terms, depending on the asset value liened, the type of tax liened and the age of the underlying tax obligations.
Understanding lien removal powers and their proper application requires the knowledge of an experienced tax relief and bankruptcy attorney. This extraordinary form of tax relief for already existing obligations and liens requires litigation against local, State or Federal taxing authorities in Bankruptcy Court. At the Law Offices of Neil Crane, we’ve spent decades successfully prevailing in prompt-winning bankruptcy litigation with all types of local, State and Federal taxing agencies.
To avoid the extreme problems caused by IRS or State tax liens, levies or seizures, seek the expert advice of an experienced attorney at the Law Offices of Neil Crane. Call us at 203-230-2233 to speak to an attorney – We never use voicemail. Or contact us online for a prompt response.
Se Habla Español
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.