When you file a chapter 7 bankruptcy does the attorney want your income taxes?

Yes. Any attorney handling a personal bankruptcy case will want an accurate and honest depiction of the debtor’s current debts, assets, and income. The most logical place to start concerning income will be through the latest tax return filed by the debtor. If the debtor has not filed, other methods can be arranged to determine the amount of income earned. However, it is important to keep in mind that any outstanding tax obligations owed, for persons not filing tax returns, may become part of the bankruptcy process, and in all likelihood, will not be discharged.

Another question along a similar line concerns the status of the income tax return refund. State laws vary concerning the exempt or non-exempt status of federal and state tax refunds. The only way to determine whether your refund will fall under exempt property is to consult with a bankruptcy lawyer.  If a debtor has already filed Chapter 7, he or she must disclose any income derived from a tax refund to their attorney and the trustee. If the debtor receives a tax refund before filing Chapter 7, the money received may or may not become part of the bankruptcy process, depending on the applicable state laws, how the money is spent, and other case-specific considerations.

For more insight and answers about the bankruptcy process, specifically how bankruptcy may affect your tax returns and refunds, it is highly advisable to consult with a bankruptcy lawyer in your state of residence.