How to File Bankruptcy for IRS Debt
Two types of personal bankruptcy are under the United States Bankruptcy Court, and both types can include debt owed to the Internal Revenue Service (IRS). A Chapter 7 bankruptcy is essentially an estate liquidation that sells off assets of the estate in order to pay creditors. A Chapter 13 bankruptcy plan is a repayment plan set by the court for a debtor to make payments to a Chapter 13 Trustee for a term of three to five years.
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Instructions
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Gather all debt and creditor information. Before filing for bankruptcy, a debtor (or joint debtors) must notify all creditors of a pending bankruptcy petition. You will need all contact information for each creditor and an estimate of how much you owe to each creditor.The three types of creditors are secured, unsecured and priority unsecured. A secured creditor has a security interest on the debt, such as a mortgage secured by your house. An unsecured debt has no security interest, like a credit card, while a priority unsecured debt is unsecured, yet the law gives that debt a priority interest. Usually child support and alimony fall into this category.
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Decide whether you wish to hire an attorney or proceed pro se by representing yourself. A bankruptcy attorney can help you create a personal bankruptcy plan and strategy to complete your bankruptcy and discharge your debt. An attorney can also help you decide which chapter of personal bankruptcy is suitable for your situation.
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Create your bankruptcy petition. Create your bankruptcy petition by yourself or with the help of an attorney. Make sure to list any IRS debt you may have in your bankruptcy plan. The treatment of your IRS debt will ultimately be determined by the bankruptcy court when the court confirms your bankruptcy plan.
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Complete the terms of your bankruptcy plan to receive a discharge. Once your plan has been confirmed by the bankruptcy court, make sure to complete all plan terms. Once all terms have been completed, the court will issue a "discharge". This means that all debts included in the bankruptcy plan have been discharged and the bankruptcy has been successful.
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