Both Chapter 13 and Chapter 7 bankruptcies give New York residents a clean slate upon which to build a secure financial future. A Chapter 7 filing can also help debt-strapped people get out from under some of their tax obligations. This is a perfectly legal approach to discharging or minimizing tax debt, as long as the government does not believe that you are attempting to evade your tax obligations unlawfully.
The bankruptcy attorneys in our office know that not everyone accused of tax evasion through bankruptcy intended to defraud the government. We know that most people who file a Chapter 7 or another form of bankruptcy simply want to put their financial lives back together. Unfortunately, tax evasion allegations can derail these attempts and land the person who files a bankruptcy in serious legal trouble.
In cases where a person’s debt is relatively simple, filing bankruptcy alone can and does work out, although it is not recommended. For example, if a person only owes two or three creditors, filing a bankruptcy alone might not be difficult. It is when you owe many creditors that things become more complicated when you try to ease your debt. Add tax obligations on top of this debt and you can see how beneficial Chapter 7 legal help can be.
To avoid accusations of tax evasion through bankruptcy, it is always wise to seek legal assistance or advice. A skilled and experienced attorney has a deep understanding of the current tax laws. He or she will be able to advise you with authority about which bankruptcy method will help you address your tax debt within the confines of the law. The end result puts you in a better place to move forward while remaining a respectable and law-abiding citizen.
If you would like to learn more about your bankruptcy options, we invite you to read our website and our blog posts.