Does bankruptcy cover tax debt? This is a very common question.
If you are facing tax debt and have been unable to get a payment agreement with the taxing authorities or have defaulted under an existing payment agreement, Chapter 13 bankruptcy may be an option for you. In Chapter 13, you will have 3-5 years to pay back tax debt. Since most tax debt is not dischargeable in Chapter 7 and most structured tax agreements require payment in less than 3 years, Chapter 13 may offer the most feasible plan to address payment of back taxes.