Many people filing for Chapter 7 or Chapter 13 bankruptcy want to know what happens to their tax debts in bankruptcy. If you owe money to the IRS or another taxing authority, you can get rid of that debt in bankruptcy in very limited circumstances. In Chapter 7 bankruptcy, if your tax debt meets certain criteria, you can discharge it. In Chapter 13 bankruptcy, you can pay your tax debts through your repayment plan.
Find out which tax debts can and cannot be discharged in bankruptcy, how the automatic stay helps stop IRS collection temporarily, and other ways bankruptcy might help with tax debt.
Eliminating Tax Debts in Bankruptcy
Most taxes can't be eliminated in bankruptcy, but some can.
Tax Debts in Chapter 13 Bankruptcy
In most cases, you cannot discharge (wipe out) tax debts in Chapter 13 bankruptcy. Instead, you repay your tax debts through the life of your Chapter 13 repayment plan, which could last either three or five years. But there are exceptions.