Filing Taxes in Bankruptcy

I’m Mark Nusz, and I’m a bankruptcy attorney and I am going to discuss the issues surrounding filing taxes in bankruptcy.

Filing Taxes in bankruptcy:

We are in that time of year when I get a bunch of questions about when my clients should be filing their taxes.

If you are already in bankruptcy, and you haven’t yet filed your 2018 taxes, then you may need to do so during the bankruptcy case. When this happens, you have to file the old fashioned way, by using the paper forms. You can expect to wait quite a long time for your refund (if you are due one). Also, it is important to remember that you have to include a short note with your income tax return, in the envelope with the return, that you are in a bankruptcy case. Tell them the case number, and the court in which you’ve filed your case. Make sure to speak to your bankruptcy attorney about all of this before you do anything.

Filing Taxes before bankruptcy:

If you haven’t filed your case yet you may want to get your taxes filed before you file your bankruptcy case. This way, you can file electronically, and you’ll get your refund back more quickly. You may or may not want to wait for the refund to arrive before you file bankruptcy also. That is a consideration that you’ll want to take up with your bankruptcy attorney, as well. You need to make sure to protect the income tax refund with a valid exemption. This is true whether you have already received the money, and its in your bank account or you are owed it from the IRS and haven’t yet received it (whether you’ve filed your return or not). This is because this money is still an asset to you, even if the money is not in your possession.


These are all considerations that you should take up with your bankruptcy attorney and one of the benefits to having an attorney handle your bankruptcy. Your current income tax return is usually asked about by trustees in the Meeting of Creditors, and that is especially true at this time of year – during tax time.

Again, please talk to a bankruptcy attorney about issues involving tax while in a bankruptcy, or contemplating a bankruptcy in the future.