The American Bankruptcy institute reports that instead of bankruptcy filings going down, they have risen. How much? Year-to-date over the 2009 level by 11%.
U.S. consumer bankruptcy filings totaled 1,165,172 nationwide during the first nine months of 2010 (Jan. 1-Sept. 30), an 11% increase over the 1,046,449 total consumer filings during the same period a year ago. The consumer filings for the three-quarters of 2010 represent the highest total since 2005, when Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) to try and stem the tide of filings.
Why, as a tax attorney, am I talking about bankruptcy?
Because bankruptcy — Chapter 7 in particular — can discharge (meaning completely wipe out) personal 1040 obligations — but only if filed according to a set of very complicated rules. Unfortunately, I've seen Bankruptcy Attorneys across the country fail to understand the complicated rules. Situations where if things were handled just a little bit differently, their clients would owe the IRS nothing.
So, if you owe back taxes and are considering bankruptcy, be sure to properly investigate whether or not you can get rid of your back taxes before filing. Contact us for assistance at 888-727-8796 or email us at email@example.com. We can advise you if bankruptcy is your best option, or if you could perhaps settle your back tax debt using other options.