Oklahoma Bankruptcy HelpOklahoma Bankruptcy Facts Regarding Taxes

Bankruptcy reform laws passed in 2005 made it much more difficult for people to eliminate their legal obligation to repay tax bills in Tulsa, Oklahoma.

It is important to talk to a lawyer about Oklahoma bankruptcy facts regarding taxes, because in many cases “no” is the answer to the question of, “can you file bankruptcy on state and federal taxes?”

Oklahoma Bankruptcy Facts Regarding Taxes

Debtors can only ask for partial or complete forgiveness on tax bills incurred at least three years before filing a request for personal bankruptcy in Tulsa, according to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA.)

The three-year window of time begins with the date the tax returns were filed with a state government or the Internal Revenue Service (IRS.)

So if a consumer filed his 2009 tax return in 2014 and owes taxes as a result, he could not ask for leniency on that debt in a bankruptcy case filing until 2017.

Also, BAPCPA requires everyone filing personal bankruptcy to have all required tax returns submitted to their state and federal government offices before being allowed to request bankruptcy in Oklahoma.

So if someone files a request for Chapter 7 bankruptcy in 2016 but still owes taxes from 2014, this debt will not be protected from legal actions.

The IRS and state governments have the option to sue delinquent debtors, which can create a tax lien against the consumer’s assets. Also, the tax lien status will negatively impact the debtor’s credit rating.

Government officials also can demand wage garnishment orders for people who are working but refuse to pay overdue taxes.

Tax Refunds and Bankruptcy in Tulsa

Oklahoma bankruptcy facts also cover issues with tax refunds.

If someone files Chapter 7 in March and gets a tax refund in May, he will likely relinquish that money to the bankruptcy trustee. However, any tax refunds received once the Chapter 7 is finalized belong solely to the debtor.

In Chapter 13, debtors undergo a partial debt repayment plan. A Tulsa bankruptcy judge may require part or all of the consumer’s tax refunds to go toward debt repayment for a three to five year period.

Low-cost Bankruptcy Planning: Tulsa Bankruptcy Lawyer

To get the best possible outcome in your bankruptcy case, you will need to set expectations for yourself and also understand your attorney’s expectations of you.

If you’re ready to file, contact a Tulsa bankruptcy attorney at the Freedom Financial Bankruptcy Lawyers of Tulsa as soon as possible.

To receive your low-cost initial bankruptcy analysis, call the Freedom Financial Bankruptcy Lawyers of Tulsa today at 918-786-9600.