How does filing for Chapter 7 Bankruptcy affect my taxes?

Filing for Chapter 7 Bankruptcy in New Hampshire may have tax implications. The type of bankruptcy that a debtor chooses can impact their taxes. When a debtor files for Chapter 7 Bankruptcy, it allows them to discharge certain debts. This means that any debt that is discharged is never legally required to be paid back, and the debtor is no longer responsible for it. However, certain taxes are not dischargeable when filing for Chapter 7 Bankruptcy, meaning that the debtor must still pay back those taxes. This includes any unpaid income taxes for the last three years, unpaid trust fund taxes, taxes assessed within the last 240 days before filing, and any amounts due on tax returns for the last year. Also, if a debtor has received a discharge of other debts in Chapter 7 Bankruptcy, the IRS may require the debtor to pay substitute taxes on any forgiven debt. This means that the debtor may be liable for taxes on any debt that was discharged in the bankruptcy. In summary, filing for Chapter 7 Bankruptcy in New Hampshire may have implications on the debtor’s taxes. Certains taxes are still required to be paid after filing, and the debtor may be liable for substitute taxes on any forgiven debt. It is important that debtors understand any tax implications of filing for Chapter 7 Bankruptcy before deciding to do so.

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How does filing for Chapter 7 Bankruptcy affect my taxes?

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