Thinking of filing bankruptcy before the new year? It may be a good idea.

Thursday, December 20, 2018 - 23:04

Bankruptcy


With the holidays coming to a close and the stress of your upcoming credit card statements rolling in, it may be a good time for you to file bankruptcy. But there might be another reason why it's a good time to file bankruptcy now, instead of in the new year. HereI will explain a clear advantage to filing before the end of the year:

When you file personal bankruptcy the trustee will prepare and file your income tax return and keep the refund for the year of bankruptcy and any prior taxation year that you had not yet filed and received the refund for.

What this means is that by filing personal bankruptcy before the end of 2018 you will only lose your 2018 income tax refund (assuming you have already filed all prior year returns). Whereas by filing in the new year you will lose two income tax refunds. You will lose your 2019 income tax refund since it is the refund associated with the year in which you filed and you will also lose your 2018 income tax refund because it relates to a prior taxation year for which you have not yet filed and received your refund for.

Therefore, if you are considering filing personal bankruptcy and you normally get large tax refunds, it is probably in your best interest to file before the end of the year.