Tag Archives: unpaid debt

Taxes and the Collection of Unpaid Debt

taxt debt, tax debt collection, debt collectionSoon the holidays will be over and tax season will be staring us in the face.  The average tax refund in the United States is around $3,000, but not every tax payer will receive a refund.  Many people will procrastinate preparing taxes because they fear how much money they may owe.  After all, who wants to write a big check to the government?  Most people would rather owe money to their creditors than to owe Uncle Sam.  Maybe this is because they know that the IRS can garnish wages and levy or seize your property.  The IRS can even charge interest and fees on the collection of unpaid debt such as back taxes.

 

What If I Can’t Pay Tax Return Amount Due?

There are always tax-payers who are shocked in disbelief after seeing the dollar sign at the end of their tax form.  Many find that the taxes due are more than they can’t afford to pay.  What next?  The worst thing you can do is to ignore or run from your taxes.  There are stiff penalties for not paying taxes and it will cost a lot more in the long run.  If you can, file for an extension or make a partial payment.  Then, call the IRS to setup a payment plan.  Lastly, don’t forget to adjust withholdings or quarterly payments to ensure that you’re not going to owe more than you can afford to pay next year.

The IRS has payment options.  Try to work with them to resolve your tax debts.  If not, the IRS has the right to enforce collection of unpaid debt.  Eventually, you will hear from the IRS, or in some cases, from a private collection agency hired by the IRS.  You may begin to see wage garnishments coming from your paycheck.

 

How Bankruptcy May Eliminate Some or All Unpaid Debt

If you find that none of the tax return payment options reflect what you can pay, then you may have some larger debt problems that need to be addressed.  This is where we may be able to help.  Filing bankruptcy with a bankruptcy attorney at Debt Advisors can stop wage garnishments in most cases.  Wage garnishments stop due to the bankruptcy “automatic stay.”  This means that the IRS, or any collection agency, must cease all collection activities associated with the debts that you owe during the bankruptcy process, and as long as the bankruptcy is in effect.  This may include debt from unpaid taxes as well as other debts such as credit cards and medical bills.  There are some exceptions that can be discussed in detail with one of our lawyers.

If you are overwhelmed by debt, and can’t pay your taxes, find out if you are a candidate for bankruptcy. Some of your unpaid debt may be dischargeable. Reach out to Debt Advisors Bankruptcy Attorneys for legal advice.  Don’t procrastinate.  It’s always best to resolve debt issues as soon as possible.  At Debt Advisors Bankruptcy Law Firm, the initial consultation is free.