Filing for bankruptcy is the last thing a business owner wants in their professional career. It is a complex process and also has an impact on the mental health of the owner. Knowing the intricacies of filing bankruptcy is crucial to ensure one gets the best outcome from it. The bankruptcy filing is as complex as filing taxes; getting them together can complicate the case.
If you do not want the difficulty and want to complete the whole process smoothly, consider hiring a lawyer from a reputed agency like Autrey Law Firm. A lawyer will help you throughout the process and ensure your rights are exercised and your interest is protected. If you have yet to decide whether to file for bankruptcy after or before filing tax returns, you have landed on the right page.
Bankruptcy filing after-tax return
Generally, filing your tax return before you file for bankruptcy is advised. There are two scenarios after filing tax returns. First, you owe tax, and second, you should get a refund. But in both scenarios, it is better to file your tax return.
If you are bound to receive a refund on your tax, you would want to get that money into your account and use it before filing for bankruptcy. But there is an exception to submitting bankruptcy before if you want to withdraw some non-dischargeable debt from the refunded amount. If you owe taxes, filing tax returns becomes crucial because assets can be used to square off the non-dischargeable tax debt.
Best time to file a return for filing Chapter 7 Bankruptcy
A trustee is assigned to administer your case if you file for chapter 7 bankruptcy. The trustee will seek the most recent tax return file. If it is not the most recent return, you are answerable to the trustee and must explain the same.
The appointed trustee will compare the income in a tax return and bankruptcy paperwork. If any discrepancy is found, questions will be raised about you. Consult an Autrey Law Firm lawyer to avoid getting into any trouble.
Tax return filing for chapter 13 bankruptcy
It would be best if you were up to date with tax return files for filing bankruptcy under chapter 13. But it has some relief for the owners unwilling to file tax returns. The owner must present the previous four years’ tax return file before the meeting with creditors.
Need of an attorney
An attorney is imperative if you are willing to file for bankruptcy. There are some exceptions in the tax filing case, and who better than an attorney to assess your case and give the best-customized advice for your business? So, it is recommended not to compromise on an attorney to save some money and find yourself in a dire situation.
Final word Filing bankruptcy under chapters 7 and 13 can be different. Generally, filing tax returns before bankruptcy is recommended. Whether it is a prudent decision for your business or not can be advised by an Autrey Law Firm lawyer. Make sure to consult them.