Can I keep certain types of tax debts when filing for bankruptcy?

The answer to the question of whether you can keep certain types of tax debts when filing for bankruptcy in South Carolina is yes, it is possible. When a person files for bankruptcy in South Carolina, they are allowed to keep certain tax debts known as “priority” debts. These include income taxes or payroll taxes owed to the IRS for the last three years prior to filing, along with estimated taxes and trust fund taxes that are due for the current year. These taxes are not dischargeable and must be paid in full or the taxpayer may face penalties. In addition to the priority tax debts, the filer can also keep any other tax debt that was due within three years of the date of filing. This is known as “non-priority” debt and is dischargeable in bankruptcy. This means that the debt will be wiped away in the bankruptcy process, freeing you from the legal responsibility to pay the debt. It is important to remember that even if debt is kept or discharged, the IRS may still be able to collect the tax debt by other means such as a tax lien or levy. Therefore, it is important to discuss your specific situation with an experienced bankruptcy attorney to determine if keeping or discharging your tax debt is the best option for you.

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Can I keep certain types of tax debts when filing for bankruptcy?

Can I keep certain types of tax debts when filing for bankruptcy?

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