Taxes and Bankruptcy in Richmond
Regardless of why you need to file bankruptcy in Richmond, there are three key pieces of information to know. First, most bankruptcies are filed because of circumstances outside of what the individual controls. In other words, there is a good chance that your situation was not your fault. Even if some bad financial decisions were made, this is not the time to become overwhelmed with guilt.
Second, every year, thousands of people in Richmond end up filing for Chapter 7 or Chapter 13 bankruptcy so even though this is an undesirable situation you are not the only person going through this. Third, because of new bankruptcy laws and a significant amount of misconceptions, you need to work with a top-notch bankruptcy attorney in Richmond who will help guide you to the path of financial health.
Unfortunately, many people try to get through a bankruptcy on their own which in most cases, leads to disaster. By working with a reputable bankruptcy attorney in Richmond, you have a much better chance of holding on to prized possessions such as a home, vehicle, and other assets. Filing for bankruptcy in Richmond without the aid of an attorney there is a huge risk of missing something of extreme importance.
Discharged Income Taxes
A prime example of misconceptions pertaining to bankruptcy in Richmond is that income taxes cannot be discharged. The truth is that local, state, and federal income taxes can be discharged in three bankruptcy types to include Chapter 7, Chapter 11, and Chapter 13. In fact, interest and penalties can also be discharged.
However, it takes the experience and expertise of a bankruptcy attorney in Richmond to determine which taxes can be discharged, which is a somewhat complex process. Some examples of what your attorney will review are based on different rules.
One is the three-year rule, which states that back income taxes can be discharged if they will become due at minimum three years prior to you filing for bankruptcy in Richmond. Another is the two-year rule whereby income tax returns must have been filed at least two years prior to filing the bankruptcy petition. There is also a 240-day rule for taxes assessed at minimum 240 days prior to the filing of a bankruptcy.
Your bankruptcy attorney in Richmond will also be aware of potential issues that may arise pertaining to income tax. For example, if tax fraud were committed or willfully not paid, they cannot be discharged. In addition, just because income taxes are discharged as part of the bankruptcy case does not automatically remove any tax liens.
With so many variables, a good bankruptcy attorney in Richmond will have the ability to assess your situation, determine the right type of bankruptcy, and identify things that can be discharged that without legal assistance might easily be overlooked. For helpful information and to find a reputable attorney, you can use the free services of Bankruptcy-America or a similar service locally.[i]