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A state tax levy can occur when you have any obligation to a state that has gone unpaid. These outstanding obligations can include property taxes, child support payments and court ordered judgments. A levy adversely affects your credit rating and can cause undo financial hardship and strain for you and your family.
Avoiding a state tax levy can be done by taking a few proactive steps to address your outstanding liens and judgments, or making arrangements for any outstanding payments. Below are a few of the items mentioned that can be addressed to help you avoid a state tax levy.
Pay All Outstanding Items
By simply retiring all outstanding items, including support and maintenance payments, alimony, taxes and judgments will eliminate the need for a state to initiate a levy against you or your property. With the outstanding items paid off, there is no cause for the state or anyone to seek a levy.
Advantages
* Paying off outstanding items removes them from consideration to be levied.
* You have a renewed peace of mind knowing that your financial status is clear.
Disadvantages
* You may have to incur additional debt in order to obtain the money necessary to retire outstanding items to the state.
* You may create new financial hardship for yourself or family as a result of paying off the outstanding amounts.
Negotiate a Payment Plan
You may attempt to negotiate a payment schedule with the state taxation department or other agencies. This may produce a mutually acceptable schedule of payments that are comfortable for you to make and indicate a willingness to address the outstanding items in question.
Advantages
* A payment schedule will assure the party(s) owed that you are sincere in your efforts to address the matter and resolve it.
* You may be able to negotiate a lower amount for repayment through a debt reconciliation process.
Disadvantages
* The party that you owe money to may not agree to the terms you set forth for the repayment, requiring you to pay the entire amount in order to avoid a state tax levy.
* There may be finance charges associated with the repayment plan that will add to your cost.
Declare Bankruptcy
Although there have been significant changes to bankruptcy law in recent years, filing for personal bankruptcy may be your only option to discharge with the items and be able to start new. Declaring personal bankruptcy is usually the least desired option but may be the only way to address your situation and improve your financial situation.
Advantages
* Declaring bankruptcy gives you an out from your obligations and provides a clean financial slate.
* You may be able to discharge the bankruptcy in a number of years and be able to create a new financial profile.
Disadvantages
* Personal bankruptcy laws have changes and some of the items subject to a state tax levy may not be dischargeable.
* You may need to incur the expense of hiring a personal bankruptcy attorney in order to interpret the law and provide you with the best approach to bankruptcy.
Avoiding a state tax levy can be an easy or difficult process depending on the extent of your outstanding liabilities. Properly managing your finances and seeking advice before a situation gets out of control is your best measure against a state tax levy.
Avoiding a state tax levy can be done by taking a few proactive steps to address your outstanding liens and judgments, or making arrangements for any outstanding payments. Below are a few of the items mentioned that can be addressed to help you avoid a state tax levy.
Pay All Outstanding Items
By simply retiring all outstanding items, including support and maintenance payments, alimony, taxes and judgments will eliminate the need for a state to initiate a levy against you or your property. With the outstanding items paid off, there is no cause for the state or anyone to seek a levy.
Advantages
* Paying off outstanding items removes them from consideration to be levied.
* You have a renewed peace of mind knowing that your financial status is clear.
Disadvantages
* You may have to incur additional debt in order to obtain the money necessary to retire outstanding items to the state.
* You may create new financial hardship for yourself or family as a result of paying off the outstanding amounts.
Negotiate a Payment Plan
You may attempt to negotiate a payment schedule with the state taxation department or other agencies. This may produce a mutually acceptable schedule of payments that are comfortable for you to make and indicate a willingness to address the outstanding items in question.
Advantages
* A payment schedule will assure the party(s) owed that you are sincere in your efforts to address the matter and resolve it.
* You may be able to negotiate a lower amount for repayment through a debt reconciliation process.
Disadvantages
* The party that you owe money to may not agree to the terms you set forth for the repayment, requiring you to pay the entire amount in order to avoid a state tax levy.
* There may be finance charges associated with the repayment plan that will add to your cost.
Declare Bankruptcy
Although there have been significant changes to bankruptcy law in recent years, filing for personal bankruptcy may be your only option to discharge with the items and be able to start new. Declaring personal bankruptcy is usually the least desired option but may be the only way to address your situation and improve your financial situation.
Advantages
* Declaring bankruptcy gives you an out from your obligations and provides a clean financial slate.
* You may be able to discharge the bankruptcy in a number of years and be able to create a new financial profile.
Disadvantages
* Personal bankruptcy laws have changes and some of the items subject to a state tax levy may not be dischargeable.
* You may need to incur the expense of hiring a personal bankruptcy attorney in order to interpret the law and provide you with the best approach to bankruptcy.
Avoiding a state tax levy can be an easy or difficult process depending on the extent of your outstanding liabilities. Properly managing your finances and seeking advice before a situation gets out of control is your best measure against a state tax levy.
