Virginia Bankruptcy Law - Taxes

11 U.S.C. 523. - Exceptions to discharge - provides (a) discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt - (1) for a tax or a customs duty - (A) of the kind and for the periods specified in section 507(a)(2) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed; (B) with respect to which a return, if required - (i) was not filed; or (ii) was filed after the date on which such return was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or (C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.

Virginia Bankruptcy Law -  In Practice

Only taxes which were declared, due, and payable, more than two before filing Virginia bankruptcy are dischargeable. Any deviation from full disclosure will prevent discharge. In practice, expect liens to attach before the expiration of two years. Tax liens will be enforced against specific property regardless of filing.

Be aware that all options are not available to all debtors. The availability of alternatives depends on several factors. State & federal laws change frequently through the legislative process and through court interpretations. Each debtor presents a unique financial history and assortment of debts. Local rules and customs vary. Nevertheless, all debtors gain the maximum benefit available similarly: careful planning and selection of options before filing.

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