Do I have to file for a tax return before filing for bankruptcy?

Yes, you have to file a tax return before filing for bankruptcy. Not filing a tax return filing can be detrimental to a bankruptcy filing. There are many reasons why a bankruptcy can be denied, so discussing your candidacy for bankruptcy with a Plano bankruptcy lawyer can help ensure that all is in order when petitioning. One of the reasons it may be denied is failing to file tax returns.

What can happen if I don’t file for a tax return before filing for bankruptcy?

When someone files for bankruptcy, the court needs evidence to support the fact that the person does not have the money to pay creditors. One source of required evidence is tax returns. Not filing a tax return is among the reasons bankruptcy filings may be denied.

The current tax return must be filed in order to petition to file for bankruptcy. So if filing for bankruptcy in June of 2013, the tax return for 2012 must be filed before filing for bankruptcy.

If a tax refund is given on the current return, it may be seized by a bankruptcy trustee and used to pay back taxes and creditors. If filing Chapter 13 bankruptcy, future refunds may be seized, whereas only refunds from before filing for bankruptcy may be seized in Chapter 7. 

Contacting a Plano Bankruptcy Lawyer

Bankruptcy can be denied for various reasons. It is important to know the laws and to follow all requirements. A Plano bankruptcy lawyer can help with the filing process and ensure that clients understand that they must file for a tax return before filing for bankruptcy.