If you need to file for bankruptcy protection some of the most important documentation that you will need to provide concerns your tax information. Most individuals do not realize the importance of these documents when the decision to file for bankruptcy is made. What happens if you do not have the documentation needed though? Can you still file for bankruptcy with this essential information missing?
When you file for bankruptcy there are a number of documents that must be turned in along with the bankruptcy petition. This includes a list of creditors, all of your assets and debts, and all sources and amounts of income that you have. The tax documentation is needed to verify your income to the court, and to show that you are up to date on your tax form filings with the government. This is especially important if you are filing for bankruptcy under Chapter 7 of the bankruptcy code because most if not all of your debts will be discharged and eliminated. Under chapter 13 bankruptcy you must pay off some of the debt with a scheduled payment plan and the court will still need to verify your income and expenses.
There are a number of reasons why the bankruptcy court asks for tax documentation if you file for bankruptcy. The first is that some individuals are not honest and will lie about income. Tax returns verify the income you had last year, and allows the court to compare the previous income with the income that you currently make. If you are not current on filing your tax returns then this should be done before you file for bankruptcy. A tax professional can help if you need assistance filing any missing returns.
In some cases your creditors may be legally entitled to request a copy of your tax returns, but this is not true in every case. An experienced bankruptcy lawyer can help you determine whether this is a possibility in your case or not, and assist you in getting the financial debt relief that you want and need. If you are due a refund when you file taxes then this money will be considered part of the assets in a bankruptcy case in most situations. For this reason many qualified bankruptcy attorneys suggest filing before you file.
If you received a refund within a recent period the bankruptcy court may ask questions to determine how these funds were used. If the court decides that the money was used improperly or in a wasteful way then your bankruptcy case could be dismissed. It is advisable to carefully handle finances for the 6 months previous to filing bankruptcy in some cases to avoid any problems with your case. Always consult an experienced bankruptcy attorney as soon as you start experiencing financial difficulty, to ensure the best possible results for your case.
The bankruptcy attorneys at Richard West Law can provide a free debt consolidation consultation to help you find the right answer for your unique debt problems and circumstances. Visit https://www.debtfreeohio.com or call (513)771-8700 or (937)748-1749 to get the answers you want, and the financial relief you are looking for.