Filing Bankruptcy | Help With Past Due Taxes

Do You Owe the State or Federal Government for Past Due Taxes?

If you owe past due taxes to the federal, state or local governments and you are worried about paying them, you probably should be. These governmental authorities have are probably the most powerful Creditors that you can have. They can levy on and take your real estate and personal property. They can seize your bank accounts. They can garnish your wages. In other words, they can play very rough. So, if you are worried about not paying the money that you owe the IRS or the State of Michigan, you have good cause to worry. But what if you do not have the money to pay them! The answer is that if you owe Federal, state or local taxes and you are also behind in other payments to creditors, Federal Laws can give you assistance. The U.S. Bankruptcy Code allows you to stop the collection efforts of the federal government, State of Michigan and local governments in their tracks!!

Filing Bankruptcy Stops Tax Garnishments

Many times, the biggest pressure on you is a garnishment by the IRS or State of Michigan Department of Treasury. That garnishment may be taking out of your wages and away from your family money that you currently need to take care of you and your family. Filing bankruptcy stops tax garnishments! Yes, the U.S. Bankruptcy Code even allows you to stop the IRS in its tracks. Just like any other Creditor that you may have, as soon as the taxing authority finds out about your bankruptcy, it is must release the garnishment. That’s right! You can stop the government in its tracks. It does NOT matter what kind of tax you owe. The garnishment must stop. This is only one indication of many that should allow you to realize how powerful the U.S. Bankruptcy Code is.

You may still owe for the taxes and you should know that many taxes are not capable of being discharged in bankruptcy, but many are. But with the garnishment lifted, your receiving your paycheck and with the power of the law that you get from the U.S. Bankruptcy Code you are in a better position to deal with your tax liabilities on terms you can afford.

If the tax is one of the types that are dischargeable in bankruptcy, it will be gone forever and so will the taxing authority’s garnishment and the liens and the levies.

Dischargeable Income Tax

If you owe Income Taxes and the taxes you owe are more than 3 years old, you may not have to pay them back at all. Your petition has to be filed more than three years from the date of the filing of your tax return for the period for which you owe taxes. So, if your tax liability is for the year 2002, but you did not file the 2002 return until April of 2005, the three years period starts on the day of filing in 2005. This means that your petition in bankruptcy would have to be filed after April of 2008, in order to discharge the taxes for 2002. But if you had filed your tax return in April of 2003, when the return was originally due, you would be able to discharge the taxes owed at any time after the expiration of three years from the filing date in 2003. Beware! If you never file the return, the clock never starts.

Most people believe the myth that all taxes are not dischargeable. [Adam, provide link to Myths about Bankruptcy.] Don’t you be fooled. The fact is that certain older taxes are “dischargeable. There are rules that apply to determine if your back income taxes are dischargeable. Gudeman & Associates, P.C., knows how to apply those rules. We work with them every day. When you call for your free consultation, bring your tax records to discuss it with us. We can also have you sign a form that lets us get information about you from the IRS or the State of Michigan and to verify your liabilities and to determine whether or not your tax liability is dischargeable.

Every year, Gudeman & Associates, P.C. helps our clients get rid of hundreds of thousands of dollars in income taxes.

What About the Taxes That Are Not Dischargeable?

We can get you up to 60 months to pay it back. This assumes you file a Bankruptcy Petition under Chapter Thirteen This type of case is also called a “Reorganization.”

What does this mean? It means you can get the IRS off your back for 60 months. It means you can set up payments that you may be able to afford. By way of example, if you owe the IRS $10,000.00 in “non-dischargeable” taxes, you can require the IRS to take as little as $38.46 per week on principal. In some cases, you can even require the IRS to take payments without interest. So, if you are afraid that the IRS is going to levy on your bank account or garnish your wages, there is no need to be afraid anymore. You can file for protection under the U.S. Bankruptcy Code and the IRS and the State of Michigan have to comply with the rules in Bankruptcy, not their own. You can fight back, just by using the power of the laws that have been written to protect you. Gudeman and Associate, P.C. will help.


The results that we are able to achieve will vary. The example above is provided just to illustrate how powerful the U.S. Bankruptcy Code is and how much power it puts in your hands.

Gudeman & Associates has handled thousands of such situations and can put to use the experience and expertise that it has developed to your benefit.

Bankruptcy may be the right solution for you and paying back taxes.

Know your options.

Call (248) 546-2800 for a no obligation consultation