Legal Question in Bankruptcy in Massachusetts

Re: including taxes in bankruptcy

You MUST include them. One of the most important rules about bankruptcy is that ALL of your assets and debts must be disclosed, regardless. However, please keep in mind that taxes are not necessarily subject to being discharged. If your problem is primarily taxes, you need to speak with an attorney to determine whether bankruptcy will really help you. Even though 95% of my practice is bankruptcy, a bankruptcy case is not always the solution for debt problems!

Re: including taxes in bankruptcy

Under certain circumstances personal income taxed can be discharged in bankrutpcy. There are a number of factors involved prior to being able to discharge income tax liabilities. These are: i) the tax return must have been filed at least 2 years prior to the date of the bankruptcy filing; ii) the tax return must be non-fraudulent; iii) the recent due date for filing the return(s) in question must be at least 3 years prior to the bankruptcy filing; iv) the tax must have been assessed at least 240 days prior to the filing of the bankruptcy; and v) there must be no willful attempt to evade the taxes due. As you can see, the standards are quite complex and would require the services of qualified bankruptcy counsel. If these taxes due are so-called trust fund taxes (ie. personal liability for unpaid withholding taxes, sales tax), taxes of this sort are not dischargeable in bankruptcy.