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Fed Tax owing and bankruptcy

Your opinion would be much appreciated. I currently have $160K in Fed Tax owing based on 6 years of not paying my taxes due to deaths in the family and marital issues, and approx $55K in unsecured credit card owing (multiple CC).

If I file for bankrupcy is there any reason that the amount owing to the Fed gov`t will not qualify me for bankrupcy or extend the months before I get discharged. I believe its 9 months if all goes well and I meet my obligations.

Would the amt owning for back taxes be an issue when filing for bankruptcy ?

I have NEVER filed for bankruptcy before.

Thank-you

Posted from: Ontario

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One Response to “Fed Tax owing and bankruptcy”

Barton Goth – Goth & Company Inc. – Bankruptcy Trustees said...

If you file for bankruptcy your tax debt will be cleared as a result of the bankruptcy, but given your situation your bankruptcy will be extended past the normal 9 months. What will take place is he tax department will oppose your discharge, go to court and present all the reasons that they believe you should not be cleared from this tax debt. This will include the fact that you would appear to be a perrenial non-filer, have a significant amount owing to the government for tax and should have been making payments to the government all along. This is an argument that the court will listen to and as a result will look at your current financial situation to determine what type payments and over what time period the court will require.

The best thing for you to do is to contact a local trustee as they will be able to advise you what the typical practice in your local courts is.