bankruptcy terms
How to File Chapter 13 Bankruptcy
Can You File Bankruptcy on Taxes and Get Relief? Can you file bankruptcy on taxes? This is one of the
October 22, 2025
How to File Chapter 13 Bankruptcy
Can You File Bankruptcy on Taxes and Get Relief?
Can you file bankruptcy on taxes? This is one of the most common questions people ask when they’re drowning in IRS debt. The short answer is yes, but only in certain circumstances. Bankruptcy may help you discharge some income tax debt, but strict rules determine what qualifies.
In this article, we’ll explore when you can file bankruptcy on taxes, what types of tax debt are eligible, and how to determine if it’s the right step for your situation.
How Bankruptcy Treats Tax Debt
Bankruptcy can eliminate or reorganize tax debt, but not all tax debts are treated the same. If you’re asking, can you file bankruptcy on taxes, you need to understand the rules tied to the bankruptcy chapter and the age of your tax debt.
Chapter 7 and Tax Debt
Chapter 7 bankruptcy may allow certain income tax debts to be discharged if they meet specific requirements. This chapter addresses eligible debt without a repayment plan.
Chapter 13 and Tax Debt
Chapter 13 involves a repayment plan over 3 to 5 years. It can help you catch up on IRS debt while protecting your assets. Non-dischargeable taxes must be paid in full during the plan.
When Can You File Bankruptcy on Taxes?
The IRS and bankruptcy courts use the 3-2-240 rule to determine if tax debt qualifies for discharge in Chapter 7:
- 3 years: The tax return must have been due at least three years before you filed.
- 2 years: You must have filed the tax return at least two years before filing for bankruptcy.
- 240 days: The tax debt must have been assessed at least 240 days prior to your bankruptcy filing.
Only income taxes qualify. Payroll taxes, fraud penalties, and unfiled returns do not.
Additional Conditions
- No fraud or willful tax evasion
- The return must have been filed (late returns sometimes disqualify)
- Taxes must be income-based
Meeting all these conditions is key to answering yes to can you file bankruptcy on taxes.
Tax Debt That Can’t Be Discharged
Even if you’re eligible to file bankruptcy on taxes, some tax debts remain ineligible for discharge:
- Recent tax debts (less than 3 years old)
- Unfiled tax returns
- Tax penalties for fraud
- Trust fund taxes (like payroll withholding)
If your debt falls into these categories, Chapter 13 may help manage payments, but discharge isn’t likely.
Filing Bankruptcy on Taxes: Is It Worth It?
Whether you should file bankruptcy on taxes depends on your financial picture:
- Do you owe more than you can realistically pay?
- Are you also facing other types of debt (credit cards, medical bills)?
- Are you at risk of wage garnishment or asset seizure?
Bankruptcy can be an effective way to halt collections and create a path forward. But understanding whether your tax debt qualifies is essential before proceeding.
Can You File Bankruptcy on Taxes and Move Forward with Confidence?
If you qualify under the IRS timeline rules, then yes—filing bankruptcy on taxes could eliminate burdensome income tax debt and stop aggressive collection actions. Not all debts can be discharged, but bankruptcy may help you reduce what you owe or give you more time to pay.
Working with a bankruptcy attorney or tax debt professional can help you navigate the rules and determine the best course of action.
Get Help Filing Bankruptcy on Tax Debt Today
Still asking, can you file bankruptcy on taxes, and wondering if your IRS debt qualifies? You’re not alone—and help is available. The professionals at BankruptcyAttorneys.net can review your case and determine if your tax debt meets the discharge requirements.
Get a free evaluation today and learn whether bankruptcy is the right tool to eliminate or manage your tax burden.
Frequently Asked Questions (FAQs)
Learning how to file Chapter 13 bankruptcy can help individuals address debt while following a court-approved repayment plan. Understanding how to file Chapter 13 bankruptcy properly can help you navigate the process and understand available legal options. This reorganization bankruptcy creates a 3-5 year repayment plan that makes your debts manageable. You’ll discover the essential steps, required documents, and timeline for successfully navigating this legal process.
Chapter 13 bankruptcy, often called “wage earner’s plan,” helps individuals with regular income restructure their debts. Unlike Chapter 7, you don’t lose your property but instead follow a court-approved payment plan.
Step-by-Step Process: Filing Chapter 13 Successfully
The process of how to file Chapter 13 bankruptcy involves several critical steps that must be completed accurately:
- Complete Credit Counseling You must finish an approved credit counseling course within 180 days before filing. This requirement cannot be waived, and the certificate proves you’ve explored alternatives to bankruptcy. Find approved counseling agencies through the U.S. Trustee Program.
- Gather Required Documents Collect tax returns (2 years), pay stubs (60 days), bank statements, property deeds, vehicle titles, and a complete list of creditors with balances owed.
- Calculate Your Disposable Income Use the means test to determine your monthly disposable income. This calculation directly impacts your repayment plan length and monthly payment amount.
- Prepare Bankruptcy Forms Complete Form 122C-1 (means test), Schedule A/B (assets), Schedule D/E/F (liabilities), Schedule I (income), and Schedule J (expenses). Access official forms through the U.S. Courts bankruptcy forms portal. Accuracy is crucial as errors can delay your case.
Legal Requirements: Chapter 13 Eligibility Criteria
Before proceeding with how to file Chapter 13 bankruptcy, you must meet specific eligibility requirements:
Your secured debts cannot exceed $1,395,875, and unsecured debts must stay below $465,275 (2025 limits). You need regular income sufficient to fund a repayment plan. Additionally, you cannot have had a bankruptcy discharge within the past four years for Chapter 7 or two years for Chapter 13. The Federal Trade Commission provides additional guidance on bankruptcy alternatives and debt management options.
Income Documentation Requirements
Courts require comprehensive income verification including employment records, self-employment earnings, rental income, social security benefits, and any other regular income sources. Your income must be stable and sufficient to support both living expenses and proposed plan payments.
Court Procedures: Navigating the Bankruptcy Process
Once you understand how to file Chapter 13 bankruptcy, the court process follows a predictable timeline:
After filing, an automatic stay generally goes into effect, which can pause collection activities, foreclosures, and wage garnishments. Within 45 days, you must submit your proposed repayment plan to the trustee and creditors.
The Meeting of Creditors occurs 20-40 days after filing, where you’ll answer questions under oath about your finances. Creditors rarely attend, but you must bring photo identification and Social Security card. Your confirmation hearing typically happens 45 days later, where the judge approves or modifies your repayment plan.
Financial Planning: Chapter 13 Repayment Success
Successfully completing your Chapter 13 plan requires careful budgeting and commitment. Most plans last 36-60 months, depending on your income level compared to your state’s median income.
Priority debts like taxes and child support must be paid in full through your plan. Secured debts can be modified, potentially reducing interest rates or extending payment terms. Unsecured debts often receive partial payment, and in some cases remaining balances may be discharged upon plan completion.
Take Action Now: Start Your Chapter 13 Journey
If you’re struggling with overwhelming debt but have regular income, Chapter 13 bankruptcy may be an option worth exploring depending on your financial situation. The experienced bankruptcy attorneys at bankruptcyattorneys.net/ can evaluate your specific situation and determine if this option aligns with your financial goals. Contact our legal team today for a free evaluation to discuss your situation and better understand the Chapter 13 process.
Frequently Asked Questions
1. How long does it take to file Chapter 13 bankruptcy?
The initial filing process takes 2-4 weeks to prepare documents, but the entire case lasts 3-5 years including your repayment plan period.
2. Can I keep my house when filing Chapter 13 bankruptcy?
Yes, Chapter 13 allows you to keep your home while catching up on missed mortgage payments through your repayment plan.
3. What debts cannot be discharged in Chapter 13?
Student loans, recent taxes, child support, alimony, and debts from fraud typically cannot be discharged in Chapter 13 bankruptcy.
4. How much does it cost to file Chapter 13 bankruptcy?
Court filing fees are $313, plus attorney fees typically ranging from $3,000-$5,000, often paid through your repayment plan.
5. Do I need an attorney to file Chapter 13 bankruptcy?
While not legally required, Chapter 13’s complexity makes attorney representation highly recommended for successful completion.
Key Takeaways
- Complete credit counseling before filing and gather all required financial documents
- Meet income and debt limits: secured debts under $1,395,875 and unsecured under $465,275
- Prepare for a 3-5 year repayment plan based on your disposable income calculation
- Attend the Meeting of Creditors and confirmation hearing as scheduled by the court
- Work with an experienced bankruptcy attorney to navigate the complex legal requirements successfully
Start Your Free Bankruptcy Evaluation
Attorney Advertising. This site is a legal marketing service and does not provide legal advice. Submitting information does not create an attorney-client relationship. Results are not guaranteed.