Facts and Information on Debt Discharge

Debt

Debt discharge is a common fact for the people who have filed for bankruptcy. People who have files under Chapter 7 bankruptcy have the full advantage of it to discharge debt. Being perplexed of how to file bankruptcy in Oklahoma, you might skip some essential facts. Like you may not know that your tax debt can be wiped out using Chapter 7. In reality, Chapter 7 debt can dissolve some of the tax debts; moreover, it can help you to get relieved from personal tax liabilities.

Therefore, before filing bankruptcy you should consult with an attorney to know what you can receive.

The tax debt should be income based. The tax should be for Federal or state incomes or on gross receipts. That means fraud penalties; payroll taxes or similar things cannot be discharged.

You must have files tax return two years prior to filing bankruptcy. To say in detail, if you wish to have debt discharge today, you should have filed the tax return two years back. Most of the courts across the U.S. do not count late return as a return. Filing a late return means the time has already expired and IRS has already filed substitute against it. Coming to an end, your tax would not be wiped out.

tax debt

The tax debt should be due for the last three years, without which you would not be eligible for tax debt discharge.

There is a 240-day rule that is generally observed regarding tax assessment. Your tax debt should be assessed by IRS 240 days prior for Chapter 7 bankruptcy filing. This time limit can be expanded. There is a clause. If the IRS has ceased activity of collection of the previous bankruptcy filing, this time span can be extended.

If you are guilty of any frivolous activities such as fraud, tax penalty etc., tax debt discharge will be easier for you.

For a detailed guide, to know how to file bankruptcy in Oklahoma, you can come to Chris Mudd & Associates. We will help on everything regarding debt elimination.