Birmingham, AL Law Firm Focuses on Taxes and Bankruptcy

Alabama Bankruptcy Attorneys Advise Clients Regarding Tax Obligations

If you have tax debt that you are unable to pay, bankruptcy could be an option for you, depending upon the type of bankruptcy you are pursuing and the circumstances of your case.

Chapter 7 Bankruptcy and Tax Obligations

To take full advantage of the chapter 7 bankruptcy laws, it is important for a debtor not to incur additional tax debt. If you are filing for bankruptcy because of overdue federal tax debt, you may need to increase your withholding or estimated tax payments.

You can still receive tax refunds during chapter 7 bankruptcy, but they could be delayed. At the conclusion of your bankruptcy, you will receive a discharge of debt which may or may not include tax debt. Whether federal tax debt is dischargeable or not depends on the circumstances of your bankruptcy.

Chapter 13 Bankruptcy and Tax Debt

In the case of individuals filing for chapter 13 bankruptcy, the following considerations should be made:

• The required tax returns for tax periods ending within four years of the bankruptcy filing must be filed.
• During the bankruptcy, all required tax returns must be filed on time or an extension must be requested.
• All current taxes must be paid as they come due during the bankruptcy case.
• Failure to file tax returns or pay current taxes due during the bankruptcy could result in dismissal of the case.

Contact an Experienced Birmingham, AL Bankruptcy Law Firm

If you have questions regarding how your tax debt will be treated in bankruptcy, contact the Birmingham bankruptcy lawyers at the Bond & Botes Law Offices online or call 1-877-581-3396 to set up your free initial consultation with a knowledgeable Alabama bankruptcy attorney today.