Chapter 13 Bankruptcy And Tax Debts in North Carolina
Last updated on May 29, 2025
If you have fallen behind on tax payments and the IRS is now at your door, Chapter 13 bankruptcy can give you a structured plan to repay or even eliminate certain tax debts under North Carolina bankruptcy law. However, timing and eligibility matter, and every case requires precise legal steps.
At Wootton & Wootton, we have helped people in Durham, Henderson and surrounding areas move past the stress of mounting debt, including old tax bills. As a family-run law firm, we treat every client as more than just a case number.
What Types Of Tax Debts Can Be Discharged In Chapter 13 Bankruptcy?
Not all tax debts are treated the same in bankruptcy. Some can be wiped out at the end of your plan. Others must be paid back in full.
The general breakdown is that:
- Income taxes that are over three years old, with timely filed returns, may be dischargeable
- Penalties and interest tied to those taxes might also be included
- Recent tax debts, payroll taxes or fraud-related taxes generally must be repaid in full
Even if some debts cannot be eliminated, Chapter 13 bankruptcy filing lets you repay what is required over three to five years without the pressure of wage garnishments or aggressive IRS collection tactics.
What Are The Requirements For Discharging Tax Debt In A Chapter 13 Case?
To discharge qualifying tax debt through Chapter 13 bankruptcy, the following must apply:
- The tax return was filed on time or at least two years before filing
- The tax debt is at least three years old
- The IRS did not assess the debt within the past 240 days
- There was no fraud or tax evasion
Every situation is unique. Working with our Durham Chapter 13 bankruptcy lawyer gives you the best chance to qualify under these rules.
Speak With A Bankruptcy Attorney Who Cares About Your Outcome
Wootton & Wootton has guided thousands of North Carolina clients to financial recovery. Call our Durham and Henderson offices at 800-836-7977 or fill out our online form for a free initial consultation to discuss your tax debt.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.