Individual Income Tax Deadline Extended
Bankruptcy - FAQ
Will bankruptcy get rid of my tax debt?
Every situation is different. Only certain taxes are dischargeable in bankruptcy. The specific facts of the tax types, the date of the taxes, and how the debt was incurred affect dischargeability. You should contact a bankruptcy attorney for specific guidance.
I received a letter demanding payment of past due taxes. Why wasn’t this debt discharged in my bankruptcy?
Only certain taxes are dischargeable in bankruptcy. The Department discharges the tax debts subject to discharge only after we receive notice of your discharge from the bankruptcy court. If the Department never received notice of your bankruptcy, it cannot discharge the pertinent tax debt. You should contact a bankruptcy attorney for specific guidance.
Should I continue to make payments on my installment payment agreement for state tax debt after the filing of my bankruptcy petition?
No. The filing of your bankruptcy petition will automatically cancel your payment agreement with the Department. Depending on the type of bankruptcy filed, future payments can be made using the bankruptcy process, or you may request a new payment arrangement for any debts that remain after you receive a discharge in your bankruptcy case.
I received a letter for a post-petition liability that will not be included in my bankruptcy. Can I set up a payment agreement for this debt?
Please contact (404) 417-6543 to set up an arrangement to pay your post-petition debts. Sometimes it is possible for you to add post-petition tax debt to your bankruptcy case. Other solutions may be possible depending on the facts of your particular case.
You are still required to pay new tax debts as they come due while in bankruptcy. Although filing for bankruptcy prevents the Department from taking actions to collect this debt while you are in bankruptcy, the debt is not dischargeable. You will still be liable for this debt once you are out of bankruptcy. The Department will continue to add interest and penalty, if applicable, on any unpaid amounts. If you continue to incur more post-petition tax debts, the Department may request the bankruptcy court’s permission to dismiss your bankruptcy case or to enforce its lien against your property.
Will the garnishment of my wages stop if I filed bankruptcy?
With certain exceptions, the Department must stop all collection activity when it receives notice that a person has filed for bankruptcy relief. You will receive a refund of any payments taken due to a garnishment or levy during the period you are protected from creditors.
Why are you sending me collection notices when I filed a joint tax return and my spouse filed bankruptcy?
If you have not filed bankruptcy, the Department will continue to collect a debt from you, even if the joint filer has filed bankruptcy. Only if you have filed bankruptcy yourself will you be protected from creditors.
Still have questions?