This article unpacks:
- The relationship between filing your taxes and bankruptcy.
- Whether your taxes need to be current to file for bankruptcy.
- If and when you can file for bankruptcy.
Is There An Advantage To Filing My Income Tax Return After Filing Chapter 7 Or 13 Bankruptcy?
Filing your tax return after filing chapter 7 or 13 bankruptcy offers no real advantage.
Once you file your bankruptcy, you will need to file your taxes before your case gets closed. Filing bankruptcy guarantees that you will have to file your tax return and show the court whether you got a tax refund. If you decide to wait because you do not want to potentially jeopardize your tax refund, you open yourself up to significant risk by postponing your bankruptcy. If this postponement takes significant time, many things may change in your bankruptcy law case. Additionally, regardless, authorities will still want to see what you do with that refund.
Tax refunds are less of an issue in the summer to early fall.. Trustees know that most people have already filed their taxes and are so far from next year’s refund that they will not likely keep a case open merely to look at a tax refund.
To summarize, there is no way to avoid this reality. There are options to get around certain aspects of it, but each way tends to make up for it in being more difficult with other factors.
Do My Tax Filings Need To Be Current Before Filing For Bankruptcy?
Bankruptcy law in Florida and the United States does not require that your tax filings be current, but you will need to make them current while in bankruptcy.
When Should I File Bankruptcy? When I Am Already In Dire Circumstances Or Before I Get There?
Legally, there is no threshold as to when you can file for bankruptcy. If or when you should ultimately depend on your specific situation. For some of our clients, $10,000 justifies filing a case because that amount will put them under financially.
There is no wrong time to file for bankruptcy. However, before doing so, we advise consulting with an attorney, especially if you are in debt. Find out the advantages and the disadvantages before initiating your bankruptcy law case.
Either way, we do not recommend ignoring the issue entirely and hoping that it goes away to then only have to file it anyway because it did not magically disappear. Being proactive will tremendously help, even if you do not get the desired outcome eventually.
With the guidance of a skilled attorney for Bankruptcy Law Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy. For more information on Bankruptcy Law in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 305-5599 today.