You knew you owed back taxes and penalties. But you couldn’t afford to pay them. So you hoped that you could get things figured out before a bad situation turned into a crisis. But now you’re sitting at the gas station with an empty tank and your debit card isn’t working. You call your bank and they tell you the IRS has frozen your checking account.
You begin to list all the possible consequences in your mind. Do you have enough fuel to get to work, or to go back home? The house payment, the light bill, and the check you wrote for groceries last night that hasn’t had time to clear add to the immediate crisis.
What you need to do is call a bankruptcy attorney immediately. Some of the taxes might be dischargeable, that means can be wiped out through a chapter 7 or chapter 13 bankruptcy case. There are specific requirements on when a tax debt can be discharged. If you bankruptcy attorney determines that the tax cannot be discharged in bankruptcy, you have the option to repay the portion of the taxes that are not discharged through a chapter 13 bankruptcy case. It will stop late fees and penalties and the debt will be paid off at the end of the chapter 13 case. After the case is filed the IRS will release the funds in your bank account.
Filing a petition for bankruptcy activates an “automatic stay“. This prevents creditors from taking any further action to collect from. And that stay even applies to the IRS.
A bankruptcy attorney can review the different types of bankruptcy, and help you determine which one is the best alternative for your situation.
And he can help you find the best way to deal with your crisis. Whether it’s a frozen bank account, a pending wage garnishment, or even a bench warrant for failure to appear at a Small Claims hearing, he can help you resolve the situation quickly and efficiently. He can delay a repossession or foreclosure long enough for you to come up with an alternative plan to minimize disruption to your life in the wake of financial crisis.
If you owe back taxes and penalties, the IRS can freeze your business or personal account without further warning. Some taxpayers have had their accounts frozen, stranding them miles from home. Others have experienced a domino effect when checks bounced, utilities were disconnected, and vehicles were repossessed.
Why wait until the crisis hits? If you owe back taxes and penalties, consult a bankruptcy attorney today to review your options and avoid frozen accounts.