3 Reasons Why Your Taxes Matter In A Bankruptcy Case

20 November 2015
 Categories: , Blog


When filing for Chapter 7 bankruptcy, one of the main things your attorney is going to need from you is your tax returns. Regardless of whether you work for someone else or you are self-employed, you need to be able to provide a couple years' worth of your returns. If you haven't filed them, you will need to do so for the attorney to have them on record and file them with your bankruptcy paperwork. While you might not understand the importance of these documents, they are pivotal in your case. Here are three things your tax returns are going to do for you and your bankruptcy case.

They prove your average income.

One of the main things on your income tax returns is going to be your annual income. Your adjusted gross income is one of the main things your attorney is going to use to determine what your monthly earnings are when filing your paperwork. While they still need current paystubs as well, this will help to form a foundation for what your income has been over the past couple years.

They show your dependents.

Another thing on your income tax return is the number of dependents you have. If you have five children and are trying to get by on one income, that is going to be a lot different than being a single individual on one income. You want to show what you are paying for each and every year. This way the court will be able to see how much extra income you truly have.

They prove your deductions.

Income taxes also show whether you are getting any tax credits or deductions for owning a home. This proves your expenses every month and gives the court an idea of what you have to pay out of your own pocket.

By giving your attorney the tax paperwork they need, you can prevent delaying your case or having the court throw your case out. It ensures everything is going to be accurate on your paperwork. After all, the whole point of a bankruptcy case is to discharge your debts because you aren't able to pay them for one reason or another. To prove that you cannot pay, you need to show your income. Whatever you do, make sure your attorney has accurate tax papers to file your case. This way, you get your discharge in a timely fashion.

To learn more, contact a law firm like Wiesner & Frackowiak, LC