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Will filing for bankruptcy affect your taxes? Atlanta, GA

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Will filing for bankruptcy affect your taxes?

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Many people who are considering seeking bankruptcy protection are concerned about taxes. Are tax liens stayed in bankruptcy? Are discharged debts taxed? Depending on the type of bankruptcy a person is filing, and his or her tax obligations and debts, the tax concerns will vary.

There are a number of complicated tax implications related to bankruptcy, and Georgia residents should discuss these with their bankruptcy attorneys in order to ensure they understand all of their rights and responsibilities related to taxes.

There are three general tax rules related to bankruptcy:

  1. The only taxes that are dischargeable in bankruptcy are personal income taxes that are at least three years old, judging by the date that the returns were due; applicable tax returns must have been filed by the taxpayer.
  2. Filing for bankruptcy will not stop an audit that is already underway. It may, however, stop collection when the bankruptcy is pending.
  3. Although debt that is forgiven is typically treated as taxable income, this is not true when it involves bankruptcy. Debt that is discharged in bankruptcy is not taxable income. Lenders may send borrowers 1099 forms after debts have been discharged in bankruptcy, and there is a way to properly address these on tax returns in order to avoid paying taxes on discharged debts.

These rules are just a few general principles. The intersection of tax law and bankruptcy law is very complicated, and, as mentioned above, it is important for Atlanta residents to seek individualized counsel regarding these issues.

Source: Fox Business, “How Bankruptcy Impacts Your Taxes,” Bonnie Lee, July 25, 2013

Posted on behalf of Gingold & Gingold

1718 Peachtree St NW, #385
Atlanta, GA 30309

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Our Client Reviews

Gingold & Gingold LLC
5.0 / 5.0

Based on 28 reviews

Jack L.

They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

All C.

Mr. Gingold was recommended by an attorney I had worked with previously. I met with Ira Gingold to discuss credit issues. He went over each specific issue thoroughly. He advised me of the potential outcomes. He did all this in one meeting for a very reasonable price. When we finished I was confident in moving forward with a resolution. He definitely wants to help people take the appropriate course of action for their circumstance.

Karen B.

Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

Lyla B.

I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

Julie T.

Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

Sherard W.

I cannot say enough about this law firm. From the initial consultation to our discharge, the entire office kept me updated with every step of the entire process. I came to the Gingold after a bad experience with another law firm. Ira and Jamie immediately began treating me like family through this experience. In the end, they assisted with eliminating many debts including my 2nd mortgage. I cannot say enough about the experience and knowledge that Ira brought to the table from the office visits to the court time. Thank you very much for helping me through this tough time. Thank you.

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