Do You Need to File Your Tax Return Differently if You’re in Chapter 13 Bankruptcy?

Posted on Feb 12, 2015 By Gail Donaldson

Montgomery AL attorneyTax season is upon us and if you are in a current Chapter 13, this is a great question!  The lure of a large tax refund is very tempting to file electronically but if you owe any governmental agency to include taxes, student loans or child support arrears, you should file your tax return via snail mail.  With your return, you should include a copy of your bankruptcy notice along with a copy of your Chapter 13 plan showing the governmental agency will be paid through your plan.  Filing your return electronically does not allow the Internal Revenue Service or Alabama State Department of Revenue to undo the flag to intercept the refund.

Despite telling our clients this information, some learn this lesson the hard way!! We do not want this to happen to you!  If this word of warning is too late for you, please make sure you let your bankruptcy attorney know so we can make sure that the claim in bankruptcy is reduced accordingly.

If you need an attorney to explain Chapter 13 or Chapter 7, please schedule a free appointment.  If you receive a tax refund, this may be a good time to file Chapter 7 and get that fresh start you are seeking much sooner!

 

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