Bankruptcy Attorney | Weik Law Office | Serving Raleigh, Durham, Cary, Chapel Hill, and Wake Forest, North Carolina

If you are facing a levy from the Internal Revenue Service or the State of North Carolina, you will be able to stop the levy by filing a bankruptcy case. As soon as a bankruptcy case is filed, the Bankruptcy Court issues an order which prohibits the government from continuing it’s levy. When a Chapter 13 case it filed, it provides you with an opportunity to compel the governmental unit to accept repayment of the debt and stops the levy previously entered.

The most common types of debt that cannot be discharged or wiped out in a Chapter 7 are student loans, back taxes under a certain period, child support, maintenance or alimony, credit card debt that was used to pay off back taxes, accident claims where there was a determination of intoxication, debt incurred by the willful and malicious injury to another, court fines and criminal restitution and certain co-signor liability if you want to protect a co-signor on the account. If you have this type of debt, it will not be eliminated. There are other types of debt that are non-dischargeable, but these are the most common.

As far as the tax liability goes, income taxes that are over 3 years old can be discharged or consolidated if they were filed on time. Other taxes, such as payroll taxes, have different rules. Contact us today to know all of your rights.

Yes, your neighbor is correct.  Income taxes are treated in several ways.  Often, if a tax liability is over three years old and you have filed the tax returns on time, you can wipe out the tax liability in a Chapter 7 or a Chapter 13.

If it is determined that the tax in non-dischargeable, you can often pay the tax liability back through a Chapter 13 and extend the amount over the life of the plan.  For example, $3,000 can be paid back in a 48 month plan at only $62.50 per month, with no interest and penalties.