Filing bankruptcy is sometimes the best way to address debt issues for people who cannot pay their creditors as agreed. However, some people do not benefit from the process even after spending time and resources. You should know that this often happens to people who file without legal help. In most cases, people who handle the process on their own make mistakes that lead to disqualification. This explains why you need the guidance of a bankruptcy attorney to help you to avoid mistakes that might lead to a denial, including the tax errors discussed below.

Delaying to File Tax Returns

Failure to file your tax returns can work against you when filing for bankruptcy. For example, if you have huge tax debts, relevant authorities might assume that the delay was a strategy to avoid paying taxes. Therefore, they might refuse to discharge them after your application. This is why your attorney will want you to file your income tax returns in time, especially in the months leading up to your application. This way, you will prove that you have made good faith in complying with tax laws and filing requirements. Following this, the court might approve your application and discharge your stressful debts.

Filing Late returns

You must note that filing late returns can complicate your bankruptcy application. In this case, the judge will examine why you never filed returns at the right time. Note that if the late filing seems mischievous, the judge might not discharge the tax debt for that year. However, if you have filed your returns promptly, the court will include your tax debt with the other debt. Then, your attorney will assist you in creating a repayment plan that will enable you to repay the accrued tax debt in a more affordable arrangement.

Failing to Provide Required Information

The court will require you to provide tax payment information when applying for bankruptcy. This includes a copy or transcript of the most recent tax year before filing. In most cases, failure to provide this information might lead to a denial of your application. So, your lawyer will ensure you've included this information in your application before presenting it in court.

Bankruptcy laws and processes are complex, which increases the possibility of making costly mistakes. However, if you work with a bankruptcy lawyer, they will ensure that you follow all the filing requirements. This includes complying with tax laws as indicated in your state laws. For more information, contact a bankruptcy attorney near you.