Tax debt is not discharged in a bankruptcy filing, and must be paid. In Arizona, filing for
Chapter 13 bankruptcy is still a smart way to handle back taxes, however. In the Chapter 13 repayment plan, the bankruptcy court will determine which of your creditors are repaid, at what amount, and in what order. While the IRS is technically a creditor alongside all of the other creditors, some types of taxes take a priority position in the distribution process.
If you are faced with both an overwhelming tax debt and a bankruptcy, you will want to consult with experienced bankruptcy lawyers. In AZ, you should contact The
Frutkin Law Firm, PLC, of Phoenix. The Frutkin bankruptcy attorneys can help you navigate the tricky path of back taxes, interest and penalties that must be covered when filing for Chapter 13 bankruptcy in Arizona.
