Question
Filing taxes and Chapter 7 bankruptcy: what should I expect?
I filed chapter 7 bankruptcy. I applied in late 2008 but due to the monthly legal payments and them falling behind on their cases once I fully paid them, I didn't go to court until nearly mid 2009. I authorized my vehicle to be repo'd because of back payments and the amount left owed was discharged. All of my credit card accounts and loan accounts were also discharged. Didn't own a home or have any pre-tax accounts. I closed my checkings and savings in late 2007 because of lack of funds and overdraft charges, but reopened a new checking and savings a couple of months ago. What happens when I file taxes next year? Anything important I should know? Any paperwork I should bring with me or specific details I should know off the top of my head to give to them? I am supposed to tell them about the bankruptcy, Right? Also, I always choose zero dependants and have always recieved a refund at the end of the year. Is it true that you definitely don't get a refund after filing the bankruptcy? If so, for how many years and why? Anything else I should know about that I didn't think of?
4 weeks ago - 4 answers
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there is no question on a 1040 or a state return asking if you have a b/k file your returns as you would normally do, don't let the b/k enter into anything you enter if you have taxes owed, of course any refund will be taken, b/k does not wipe out any tax liabilities if the outstanding debts were discharged, very likely you will not receive any 1099 C's, cancellation of debt, which you would have to declare as income on your next return
by tro
4 weeks ago
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Other Answers
Assuming that your bankruptcy case has been discharged nothing is going to happen tax-wise. If your case were still open when a tax refund was payable that refund might have to be turned over to the trustee to be applied against your debts. But once it's discharged that cannot happen any more.
by Bostonian In MO- 4 weeks ago
no. if everything is discharged you should be clear. of course there are no guartantees with the irs.
by tami k- 4 weeks ago
I will try to help from my own experience with bankruptcy. You still get your tax refund but if you owe any money to the government it will be deducted from your refund. You use the word "discharged" referring to your debts. I can't tell if you mean those debts were charged-off by the companies, or you mean they were included in the bankruptcy filing. Your bankruptcy items stay on the record for 10 years. If anyone checks your credit they will see the bankruptcy. Your tax accountant will advise you what to bring next year if that is who you refer to about "bringing paperwork" but if you mean the IRS they will know already.
by jennifer- 4 weeks ago