Oklahoma Bankruptcy HelpCan I File Bankruptcy in Oklahoma on Taxes?
Bankruptcy reform laws passed in 2005 made it much more difficult for Tulsa, Oklahoma residents to eliminate their legal obligation to repay tax bills.
Thus in many cases “no” is the answer to the question of, “can I file bankruptcy in Oklahoma on taxes?”
Filing Bankruptcy in Oklahoma on Taxes
Tulsa debtors can only ask for partial or complete forgiveness on tax bills incurred at least three years before filing a request for personal bankruptcy, 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 2007 tax return in 2013 and owes taxes as a result, he could not ask for leniency on that debt in a bankruptcy case filing until 2016.
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.
Additional Considerations
So if someone files a request for Chapter 7 bankruptcy in 2015 but still owes taxes from 2013, this debt will not be protected from legal actions. The IRS and Oklahoma state government 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 Oklahoma state or federal taxes.
Potential Tax Refund Issues
Another issue related to taxes and bankruptcy in Oklahoma is that of 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 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.
