Bankruptcy and Taxes in Florida
Few debts can cause more stress, worry, and frustration than those owed to the government. It
is common for Florida residents with financial challenges to fall behind on tax payments. In their
attempt to collect on back taxes, state and federal governments may garnish wage, place liens
on your property, and even have bank levies placed on your accounts.
Government bodies have significant power to collect what they believed is owed. However, you
are not defenseless in these times. Bankruptcy protection exists to help residents facing any
number of debts. If you owe taxes that you cannot afford to pay, please contact the bankruptcy
professionals at Dolaghan Law today to learn more about your legal options.
Tax Debt Discharge in Bankruptcy
Rules governing the discharge of tax debt are quite complex. In most cases, you cannot
discharge debt that came due within the last three years. However, older back taxes may be
discharged if you filed returned for those years. Because of the complexity of this issue, it is
critical to speak with a bankruptcy lawyer to learn how the law might apply to your specific
Tax Debt Repayment in Bankruptcy
Even if your tax debt cannot be discharged in bankruptcy, there may still be benefits to filing
for bankruptcy to help provide a more reasonable path to repay the debt owed. For example,
if you file Chapter 13 bankruptcy, you may be able to repay the tax obligations over a three
to five year period without penalty while balancing any other financial obligations your have.
Every case is different, but you may also be able to use this approach to pay back taxes without
accruing all of the penalties or interest that would otherwise apply. This can ultimately save you
tens of thousands of dollars and provide the best chance for a fresh financial start.
The Benefit of an Automatic Stay
One immediate benefit to filing for bankruptcy is that an automatic stay on collection activity
goes into effect as soon as the petition is filed. This is an injunction that prevents creditors from
their collection activities, and is therefore important for all those who are facing a tax lien, wage
garnishment, or possible property repossession.
The automatic stay lasts as long as the details of your bankruptcy are sorted out—either with
debt discharge or the creation of a repayment plan. In all cases, however, the injunction can
help by pausing all activities so that you have breathing room to craft a plan for a more sound
Contact a Florida Bankruptcy Lawyer Today
It is critical to act fast when facing financing challenges. To learn more about how bankruptcy
may help you handle tax burdens or other debt, please contact a legal professional as soon as
possible. Those in Jacksonville, Daytona, and in other Florida communities can reach out to the
experienced experienced bankruptcy team at Dolaghan Law today. Please call us at 904-354-