Are There Any Benefits of Filing Business Bankruptcy?

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There are many benefits of filing business bankruptcy. A few include: Asset Protection. Once your bankruptcy petition is filed, your creditors are prohibited from contacting you and must halt all collection efforts. Your assets are protected from seizure, and business equipment and vehicles cannot be repossessed. Debt Reorganization.. You can reorganize your business debts, present a more feasible repayment plan to your creditors, and bring your accounts current over time. This solution is ideal for small and large corporations that are in serious financial trouble. Stress Relief. Imagine being able to operate your business in peace, without debt collectors nagging …

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Can I Use Bankruptcy to Discharge Tax Debts?

File bankruptcy to settle your tax debts

While some tax debts can be discharged through bankruptcy liquidation, there are exceptions. Section 523 of the Bankruptcy Code identifies three debts you must repay: 1. Unfiled tax returns. If you did not file a tax return for the year the debt is assessed, you cannot obtain a discharge. If you filed late tax returns, you must wait two years before you can seek a discharge. 2. Priority tax claims. If the tax debt is a Section 507 priority claim, it cannot be discharged in bankruptcy. Priority claims must be paid in full. They include: A tax required to be …

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How Will My Personal Bankruptcy Affect My Business?

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If you’re not running a sole proprietorship, lawsuits against your business aren’t automatically “stayed” by your personal bankruptcy filing. In most instances, a bankruptcy filing, through the power of the automatic stay, halts any lawsuit against you and your business or prevents a threatened lawsuit from being filed in court. But there are a few exceptions to this rule; situations in which the automatic stay would not apply. In these cases, a creditor’s lawsuit could continue in spite of your bankruptcy filing. Because stopping such a lawsuit is likely one of the reasons you’re filing bankruptcy, it’s extremely important to …

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What Type of Bankruptcy Is Best For Tax Debts?

satisfy tax debts with bankruptcy

Chapter 13 is the go-to bankruptcy for taxpayers who owe IRS debts that cannot be discharged in chapter 7. But before you file that petition, you should know: All priority debts must be paid in full. They cannot be reduced or discharged in bankruptcy. Not sure if your debt gets priority status? Read our article Tax Debts you Cannot Discharge in Bankruptcy. If your debts are not priority, you may have options: You can repay them through a chapter 13 plan or an IRS installment agreement. If paid through chapter 13, you will save money as you won’t pay any interest or …

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