Will an Automatic Stay Stop an IRS Tax Levy?

 Posted on September 22, 2023 in Tax Debts

When faced with financial difficulties, people may find themselves subject to IRS tax levies, where the Internal Revenue Service (IRS) seizes assets to satisfy outstanding debts. However, the automatic stay provision in bankruptcy law can have significant implications on the enforcement of tax levies. It is essential to understand that an automatic stay does indeed stop an IRS tax levy. But remember, if you are going through difficult financial times and are wondering how to most effectively navigate bankruptcy, contact a lawyer to ensure your rights and interests are protected at all times as you seek debt relief through bankruptcy. 

Understanding the Automatic Stay

The automatic stay is a fundamental provision of the bankruptcy code that goes into effect as soon as a bankruptcy petition is filed. It acts as a powerful legal shield, temporarily halting most collection actions against the debtor, including lawsuits, wage garnishments, and asset seizures. The automatic stay aims to provide debtors with breathing space to reorganize their finances and work towards a fresh start. 

The Role of Chapter 13 Bankruptcy

For those seeking to address tax debt through bankruptcy, Chapter 13 bankruptcy can be a viable option. Under Chapter 13, debtors can propose a repayment plan that allows them to catch up on delinquent tax payments over a three-to-five-year period. This can provide an opportunity to resolve tax issues while benefiting from the automatic stay’s protection against most collection actions. 

Seeking Legal Advice 

Navigating the complexities of bankruptcy law, IRS tax levies, and the automatic stay can be challenging in Texas. It is essential to consult with an experienced bankruptcy attorney who can provide guidance tailored to your specific circumstances. They can help assess your options, determine the extent of automatic stay protection, and assist in formulating a strategy to address your tax debt effectively. 

Contact a New Braunfels Bankruptcy Lawyer

Lawyers who practice bankruptcy law have a deep understanding of the complex nature of bankruptcy laws and can guide you through the entire process. They can assess your eligibility to declare certain forms of bankruptcy, help develop a repayment plan that suits your situation, negotiate with creditors, and represent you in court if necessary. Their professional knowledge will help ensure that your bankruptcy filing is accurate and complete and maximizes the chances of your successful financial recovery. Contact the experienced Boerne bankruptcy attorney with Law Offices of Chance M. McGhee. Call 210-342-3400 for a free consultation today.