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Take It to The Bank: Taxes in Bankruptcies Not Easy to Unload

June 25, 2024 (3 min read)

Before filing a consumer bankruptcy, individual debtors must determine their outstanding tax liabilities for purposes of completing a means test and properly filling out their schedules. Individuals must also provide copies of their tax returns to the U.S. Trustee. Various governmental units may have secured claims, priority claims, or general unsecured claims against the debtor and, with certain exceptions, are prohibited by the automatic stay from seeking payment of such claims outside of the bankruptcy. But there’s more to learn. This practice note discusses an individual debtor's considerations and responsibilities with respect to outstanding tax claims and tax returns as well as the treatment of tax claims in bankruptcy. 

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