I am 57 years old I have worked in aerospace for more than thirty years. Due to health issues and payment of child support, I did not file my personal state and federal income taxes for the years 2006 through 2010. The total amount I owe is over $5,000. (By the way, I no longer have health issues and my child support has been paid in full.)
I would like to know if and how bankruptcy may help me.
In your case, bankruptcy will not wipe out your unfiled and unpaid taxes. However, there are instances when bankruptcy can eliminate certain income tax debts. The requirements to wipe out income tax debts involve a number of factors, including that you previously filed an honest tax return and that the tax became due more than three years prior to the bankruptcy filing. There are other criteria as well. (To learn more, see Nolo’s article Tax Debts in Chapter 7 Bankruptcy.) Because you never filed your returns, bankruptcy won’t help.
However, there is another way to try to handle this. Have a reliable tax professional prepare your tax returns, and then file them. As soon as you have done that, call the IRS and the state taxing agency and ask them for what is called, an “installment payment plan.” (To learn more, see Nolo’s article IRS Installment Payment Plans.)
The amount you owe is low compared to what the IRS and state tax agency normally sees. They may very well give you a reasonable and fair payment plan. You don't need to hire a lawyer or accountant to arrange the payment plan. You can easily do that for yourself with a quick phone call. You can expect them to treat you with courtesy and respect, so don't be afraid to make the calls.
It makes all the difference if you call them, instead of the other way around.
Another option is to file for Chapter 13 bankruptcy. Through your Chapter 13 plan, you can force the IRS and the state to accept a payment plan from you that can stretch up to five years, if necessary. (To learn how Chapter 13 and repayment plans work, see Chapter 13 Bankruptcy.)
From bankruptcy attorney Leon Bayer.