At some point over the years, you encountered a heavy financial burden in your business and you found yourself drowning in debt to the point where you now need to declare Chapter 13 bankruptcy. When you are in a situation where you have had to declare bankruptcy, many of your financial matters may be affected. One of those things is tax liabilities and delinquencies. You may be wondering how you manage taxes in such a situation.
If your taxes are not paid together with your mortgage and added to the money in the escrow amount, they must be a separate claim in your financial plan. The taxes are paid through the Chapter 13 trustee if you are in a payment plan.
You are responsible to pay all taxes that are due after the bankruptcy claim was filed. If you are not in a payment plan, you are responsible to pay them separately. By the time you end your bankruptcy agreement, all of the taxes must be current and up to date. If you don’t pay them, the office will file a claim on delinquent taxes when you make the bankruptcy filing.
How do you decide about Chapter 13 bankruptcy?
Statistically speaking, approximately 20% of all bankruptcy filings fall under the Chapter 13 category. Under the right circumstances, Chapter 13 bankruptcy is a really workable solution to unmanageable debt. It allows the debtor who has steady money coming in to pay all of their debts over a certain time period. A common time range is three to five years. It is often the bankruptcy of choice for people who have fallen way behind on their mortgage or vehicle payments.
For you to qualify for Chapter 13 bankruptcy, you must have less than $250,000 in unsecured debt (such as credit cards) and you must have less than $750,000 in secured debts (such as vehicle loans and mortgages). If your debts exceed those numbers, you will have to file under either Chapter 7 or Chapter 11 bankruptcy. If you are going to file for Chapter 13 bankruptcy, you will have to submit to the court a proposed payment plan, including a proposal of how you will designate all of your disposable income to your creditors.
Help from an experienced Indianapolis bankruptcy attorney
If you are in a similar financial situation, the expertise of a knowledgeable bankruptcy attorney may make a tremendous difference to your case. You should not consider declaring bankruptcy as a failure. Instead, you should consider it as a chance to start over again and to forge a new path in business and in life. Once you have been able to clear your debts, you can look forward to a bright future without the tremendous burden that you suffered in the past.