The tax deadline is coming up here on April 15th to get your taxes filed. So, how does the tax deadline impact your bankruptcy filing if you need to file for bankruptcy to stop collections activities? The tax deadline does not have any impact on your bankruptcy filing. If you need to file bankruptcy to stop a wage garnishment or levy on your bank account, you can do it now. You do not need to wait until your taxes are filed before filing the bankruptcy.
A collection activity that has been initiated by your creditors does not wait for you to file your taxes. So, why should you have to wait to file bankruptcy if you need to stop collections from happening? The answer is that you don’t. Do not wait for the last minute until a collection activity will occur. If you know one is coming, you can stop the collection activity from happening if you get a bankruptcy filed so that you can activate an automatic stay preventing collections activities from moving forward. Bankruptcy protection provides you with an automatic stay. The automatic stay is what prevents collections from proceeding while you are in an active bankruptcy. An automatic stay must be lifted before collections can resume.
There are additional reasons why it would be smart to get you bankruptcy filed before your tax filing. If you are expecting a tax return, you need to be careful that the funds in the tax return will not get garnished or levied by your creditors through collections activities. A judgment granted to any of your creditors in court can allow them to levy your bank account that they are aware of. If your funds from a tax return get deposited into your bank account and a creditor has a judgment ready to levy that particular bank account, your tax refund could be gone via court ordered bank account levy. If you file the bankruptcy before your tax return comes in, you should be able to stop any bank account levy that your creditors are attempting to execute. Once again, the automatic stay under bankruptcy protection will prevent the collections activity from moving forward.
A bankruptcy filing in the midst of your tax deadline may still be helpful for your situation especially if you are expecting a tax refund as a result of your tax filing. Contact Bankruptcy Law Professionals to find out what options you have with bankruptcy to remove your debts and protect your tax refund.
Bankruptcy Law Professionals is a Southern California Bankruptcy Law Firm with offices in Orange County and Riverside. Contact Bankruptcy Law Pros to schedule a free consultation by phone or in-person with our attorneys in our Santa Ana or Riverside locations at 855 257-7671.
