What Happens To the Sales Tax In Your Bankruptcy?

Many individuals are under the assumption that all of their debts are going to be discharged if they file for bankruptcy. There are some debts that will not to be discharged in this form of debt relief.

If you were required to collect sales tax in your business which you are now filing for bankruptcy in then this debt will not be discharged in your bankruptcy action. The reason for this is because you were expected to collect the sales tax in trust for the government. As such it is known as a trust fund tax and this can also include taxes and Social Security taxes which are held from the paychecks of employees.

This type of situation can be very complex and it is most important that you retain the services of a qualified and experienced bankruptcy attorney in Dallas, TX to assist you with the entirety of your bankruptcy. It may be that you will be eligible for a Chapter 13 bankruptcy filing. As the person responsible for paying the tax it will then be handled in your repayment plan. In this case the amount owed will have to be paid back in the fall but it will be spread out over a period of time.

During this time this trust fund tax will not accumulate interest or penalties during the period of time that you are repaying. If you are not filing a Chapter 13 bankruptcy then you are still going to have to deal with this debt, however with many of your other debts being expunged it may put you into a better financial position to be able to meet your obligations. You will be faced with the penalties and interest during the process of your repayment of the sales taxes unless you pay it in full.