As a follow-up to some of my previous posts where I discussed offers in compromise and whether tax liabilities could be bankrupted or not, as well as a previous series of posts where I began analyzing the "search terms" used to "find" my site through Google, I wanted to write about whether someone should file bankruptcy first or should they try to settle their tax liability with an offer in compromise. 

    The first question to ask is would your taxes even be dischargeable in bankruptcy.  I have outlined a brief response to this question in a previous post.  Assuming you are over that hurdle and your taxes are dischargeable, I would ask my clients or prospective clients to think about several things.  The first of which is: are the taxes the only reason I am filing bankruptcy.  If you don’t have a lot of other debt that you are attempting to bankrupt, then I would recommend at least paying a qualified tax professional to do the research to see if you would qualify for an offer in compromise.  I personally do not recommend that all of my clients file an offer in compromise, but I hear from prospective clients that call on some large, nationwide companies offering similar services that I do, that they will basically file an offer in compromise for everyone that pays.  Of course, that is not possible and not a good way to spend client’s money. 

    On the other hand, if you have a lot of outstanding medical bills, credit card debt, etc. and your taxes are just the icing on the cake it may make sense to go through the bankruptcy process and give yourself a fresh start. 

    If you are considering filing bankrupcty, but you would like to speak with someone about the possibility of successfully filing an offer in compromise, please give me a call or send me an e-mail. 

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