About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.
If you're struggling with tax debt, you may be wondering if there are any tax garnishment solutions that can help you get relief. Unfortunately, tax debt is not always dischargeable in bankruptcy, but an experienced bankruptcy attorney can help you review your options. Regardless of what you decide, there are a few potential solutions along with bankruptcy that may help you resolve your tax debt.
1) File Old Tax Returns
One potential tax garnishment solution is to file old tax returns. This may help you get relief from tax debt that has been accumulating for years. If you're behind on your tax returns, an attorney who deals with debt relief cases can help you create a plan to catch up.
2) Consider Submitting an Offer in Compromise
Another potential solution is to request an offer in compromise via the IRS. This is when you offer the IRS a lump sum payment that is less than the full amount you owe. Typically, the IRS will only accept an offer in compromise if they believe that it is the only way they will collect the tax debt.
3) Set Up a Payment Plan
If you're unable to pay your tax debt in full, you may be able to set up a payment plan with the IRS. This can help you make smaller payments over time, rather than one large payment. Be aware that if you set up a payment plan, you may be charged interest and penalties. Also, defaulting on your payment plan can result in wage garnishment or tax liens.
4) Request a Hardship Withdrawal
If you have money in a retirement account, you may be able to request a hardship withdrawal in order to pay your tax debt. Keep in mind that this will result in taxes and penalties, so you may want to only use it as a last resort.
4) Discharge Tax Debt in Bankruptcy
In some cases, tax debts can be discharged in bankruptcy. However, this is not always the case. A bankruptcy attorney can review your specific situation and let you know if this is an option for you.
Also, filing for bankruptcy may help you manage other debts. When this happens, you may find you have extra funds for old tax debts that you owe the IRS.
Navigating different tax garnishment solutions can be difficult, but help is available. Reach out to a local bankruptcy attorney for help with your old tax debts, whether you're filing old tax returns or trying to avoid a lien on your property.
Share22 June 2022
