I file bankruptcy can I include back taxes?

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I file bankruptcy can I include back taxes?

I have a small restaurant and it isn’t making enough money to pay all the bills – I can pay the rent but not the taxes, or pay the taxes and not the rent. What can I do, file bankruptcy? Each month I am just getting deeper in debt. I don’t want to file bankruptcy but I am paying the vendors and the taxes are getting bigger. It is costing me money to keep the doors open.

Asked on February 2, 2011 under Bankruptcy Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There are a few debts that are NOT cleared or discharged by bankruptcy, and tax debts are one of them. (The main otherones are alimony and child supports; amounts you owed because you were sued for injuries or damage you caused while DUI; and student loans except in exceptional circumstances.) Even if your restaurant is an LLC or a corporation, there are certain tax obligations, such as for payroll-related tax and possibly sales tax, that will affect you personally. Therefore, you may wish to consider paying your tax debts--and also any debts that you may have personally guaranteed (e.g. if you guaranteed any loans, or have business credit cards in your personal name) and then declare bankruptcy for the rest.


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