Tax 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!
- Keeping Your Tax Return After Filing Bankruptcy
- Can Tax Debt be Discharged in Bankruptcy?
- Amending Your Tax Return After Filing Bankruptcy
Gail Hughes Donaldson is a Managing Partner of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She’s been helping families work through the bankruptcy process since she started with Bond & Botes back in 1993 as a paralegal. Read her full bio here.