Can bankruptcy help halt tax levies? Tax levies can drain your bank accounts, and add significant stress to your financial situation. In Texas, where many families and businesses are already grappling with rising living costs, the burden of tax levies can feel overwhelming.

Fortunately, filing for bankruptcy offers a way to address tax levies, either by stopping them temporarily or eliminating eligible tax debts altogether. Understanding how bankruptcy works about tax levies can help you regain control of your finances and start fresh.

How Tax Levies Work

A tax levy is a legal action by the IRS or state tax authorities to seize your assets to satisfy unpaid taxes. This may involve:

  • Bank account levies: Funds in your account are frozen and withdrawn to pay your tax debt.
  • Wage garnishments: A portion of your paycheck is automatically deducted to satisfy the levy.
  • Property seizures: The IRS may seize and sell valuable assets, such as cars or real estate.

The IRS typically issues a levy after repeated attempts to collect unpaid taxes. If you’ve ignored multiple notices or failed to arrange a payment plan, a levy may be the next step.

Benefits of Bankruptcy for Relief from Tax Levies

Immediate Relief with the Automatic Stay

Once you file for bankruptcy, the automatic stay immediately stops levies and other collection efforts.

Potential Discharge of Tax Debt

Bankruptcy can permanently eliminate eligible tax debts, freeing you from the risk of future levies.

Manageable Repayment Plans

Chapter 13 allows you to pay off tax debts over time without the pressure of aggressive collection tactics.

Protection of Assets

Bankruptcy helps protect essential assets, such as your home and vehicle, from being seized to pay tax debts.

Consult a bankruptcy lawyer

Limitations of Bankruptcy in Addressing Tax Levies

While bankruptcy offers significant relief, it’s important to understand its limitations:

  • Recent tax debts, payroll taxes, and fraud-related debts are typically not dischargeable.
  • You must meet strict eligibility criteria to file for Chapter 7 or Chapter 13 bankruptcy.
  • Filing for bankruptcy will impact your credit score, though this may be a worthwhile trade-off for long-term financial stability.

Hire An Experienced Bankruptcy Lawyer Now For Relief From Tax Levies

A bankruptcy attorney from the Law Office Of Joel Gonzalez can analyze your financial situation and determine the best strategy for managing tax levies. Our bankruptcy lawyer in Victoria, Alice, and Beeville, TX, can help you understand whether your tax debts qualify for discharge and guide you through the bankruptcy process, ensuring all paperwork is accurate and timely.

If you want relief from tax levies, contact us now for professional services.