Business Bankruptcy And IRS Back Taxes
A friend of mine owns a retail service business that he runs out of a commercial building that he owns. He has a mortgage on the property and he owes a lot in back taxes to the IRS. He has some equity in the property but apparently not enough to be able to borrow enough to pay off the entire IRS tax bill. And he says the bank won't let him borrow enough to make a partial payment to the IRS to buy himself more time. He is concerned that the IRS is about to seize his property and sell it to get the back taxes, which will mean he will lose his business and his only source of income. Could he declare bankruptcy to get protection from the IRS seizing his property, and then pay the back taxes to the IRS over time through the bankruptcy? I know he needs to see a bankruptcy lawyer and I will tell him that. But English is not his primary language, and he is very distraught about all of this, so I would like to be able to give him some idea of whether filing bankruptcy is even an option that might help him in his situation. I don't want to get his hopes up and tell him to see a bankruptcy lawyer if that has no chance of helping him with the IRS back taxes. He is in New Jersey in case that makes a difference.
What your friend is describing is tailor made for a Chapter 11 bankruptcy. He should speak with a NJ corporate bankruptcy attorney immediately.
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