Anyone considering a bankruptcy filing has probably wondered what might happen to money they make after they’ve filed their case.
In particular, many filers ask what might happen to a tax return received after a bankruptcy filing. This is an important question to ask, whether you’ve already filed your case or are planning to do so in the near future.
Here are some issues that come up concerning bankruptcy and taxes.
Avoiding Bankruptcy Fraud
So why is it important to tell your lawyer or trustee about income from a tax return? Because not disclosing that you have received or expect to receive money (from any source) could qualify as bankruptcy fraud. Those convicted of bankruptcy fraud are not eligible for the bankruptcy discharge and could face steep fines and even jail time.
Besides not declaring income, these actions could also constitute bankruptcy fraud:
It’s important to note that all situations are different and that if you want specific guidance about your situation, you should contact a bankruptcy lawyer practicing in your state, which you can do by filling out this form.