How do you file your taxes after filing for Chapter 7 Bankruptcy?
When you file for Chapter 7 Bankruptcy it is not the end of the world, by any means. Chapter 7 Bankruptcy happens when a person is so overdue on their debts that their creditors can actually claim the individual's assets and sell them in an effort to pay off the significant debt that has accumulated over time. Filing for taxes after a Chapter 7 Bankruptcy is actually an easy process, as long as you are careful and make sure everything is correctly done. Most of the time these situations are resolved better with a professional tax preparer, but your post-bankruptcy taxes can still be done on your own. When a trustee is appointed to handle your estate during a bankruptcy, you must fill out a Form-1040 as your obligation to the government, and the trustee must fill out a Form-1041 for the bankruptcy estate. If you happen to be both the debtor and the trustee, then you must file both tax forms as returns. This would show the IRS that you are filing for your individual taxes and your bankruptcy. With all of this said, it is best to reach out to a bankruptcy lawyer, a professional tax preparer, and/or a financial advisor who specializes in debt management. They would be able to make sure the whole process goes much smoothly.