This year, the deadline for filing federal income taxes has been pushed back to July 15, 2020, which gives Maryland residents an additional 3 months to turn in their annual returns. However, getting this year’s returns in may be the least of some people’s tax worries. Past tax debts may still be looming for some Bethesda residents who have not been able to satisfy their past due obligations.
A tax debt can be a financial headache for an individual who just does not have the money to catch up on what they owe. With too many bills competing for too little money, it may be impossible to prioritize tax payments to the government when a debtor is struggling to keep a roof over their head. Despite the dire situation that a debtor may feel when the consider the future with an unpaid debt to the IRS, they should know that they have options for addressing their delinquency.
Establishing a Payment Plan
The IRS allows individuals to spread out their tax payments over time in payment plans. These plans can be short-term or long-term and are based on factors related to the individuals’ unique financial circumstances. Individuals who opt to use payment plans to pay down their tax obligations should know that they may be forced to pay fees and additional costs for extending the period over which they repay the government. Payment plans may be good options for some dealing with tax debt, but not everyone may be able to manage ongoing payments to the IRS.
Using Bankruptcy to Eliminate Debt
Like other forms of debt, tax debt can be alleviated through bankruptcy. Bankruptcy is a legal process that allows an individual to group all of their debts together, work with their creditors and the bankruptcy court to make a plan, and execute that plan for the eventual discharge of their applicable financial obligations. Different forms of bankruptcy, such as Chapter 7 bankruptcy or Chapter 13 bankruptcy, may serve the unique needs of debtors. Before an individual elects to file for bankruptcy they may wish to speak with a bankruptcy and debt relief legal advisor.
Overwhelming debt, whether it arises from tax obligations, missed mortgage payments, heavy credit card balances, or others, can seem impossible to conquer. However, legal and financial options do exist that can help men and women dealing with significant debt to get themselves back on a stable economic path. Achieving financial freedom can be difficult to do on one’s own, but bankruptcy attorneys can give their clients the information and support they need to move themselves onto sturdy financial footing.