What Are the Tax Consequences of Bankruptcy?
You want to make certain that you understand all of the ways that bankruptcy could have an impact on your life. One place it will have no impact at all: on your taxes. There are no negative tax consequences associated with bankruptcy itself. However, that does not mean that tax considerations will not play a role as you seek relief of your debt.
At Rothschild & Ausbrooks, PLLC, we have spent more than three decades helping people just like you overcome debt in Nashville and throughout Tennessee. We know our way around the bankruptcy process, and we convey that information to you. Just like there is nothing that will catch us by surprise, we will not let anything catch you by surprise, certainly not tax issues.
No Additional Financial Burden
You already feel as if you are stuck between a rock and a hard place. The last thing you need is additional problems in the form of taxes. Bankruptcy is designed specifically to relieve your financial burdens, not add to them. Therefore, bankruptcy itself has no negative tax consequences. However, debt forgiveness does.
Tax Considerations of Debt Forgiveness
In some cases, there may be need to request that some portion of your debt be forgiven. While debt that is discharged through bankruptcy is nothing to worry about, debt that is forgiven by a creditor prior to the discharge could be counted as income for you and you could be taxed accordingly. Our attorneys will educate you about when and if this would become an issue in your case, so you will be fully prepared for any tax repercussions.
Contact Us for a Free Bankruptcy Consultation
Please contact Rothschild & Ausbrooks, PLLC, today to learn from our lawyers about tax considerations for bankruptcy.