TaxMasters Inc., filed for Chapter 11 bankruptcy protection, leaving current customers in the lurch.
TaxMasters is known for their late-night television commercials promising that they can help people resolve tax issues with the IRS. The company, however, has had numerous complaints by their clients and has been the subject of a lawsuit in Texas for misleading customers about their tax resolution practices.
TaxMasters was sued by the Texas State Attorney General after they offered installment plans to consumers, but failed to disclose that they would not begin working on a client’s tax issues until the company was paid in full and missed crucial deadlines with IRS. In their bankruptcy filing, TaxMasters listed a meager $50,000 in assets with 1,000 to 5,000 creditors owed up to $10 million. TaxMasters said that it would continue operations while their bankruptcy attorney works to reduce their debts. With so little assets, many are left to wonder if the company can continue to operate.
Bankruptcy is many times the only course of action a company can take when they have become insolvent. A bankruptcy lawyer can draft a debt reduction plan after evaluating their finances and help the troubled company negotiate with creditors. Whether the entity seeking bankruptcy is an individual or a business, a bankruptcy attorney will help them work on resolving their financial issues and give them the opportunity to get a fresh start.
