Does bankruptcy affect the income tax returns? 6 Answers as of March 29, 2012

Does bankruptcy affect income tax returns or probate court rulings as head of an estate in which the estate is awarded money from existing claims? And how long after filing until the wage garnishments stops?

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Philip R. Boardman, Attorney at Law
Philip R. Boardman, Attorney at Law | Phil Boardman
Filing bankruptcy will not affect your tax return status. Garnishments are to stop immediately upon filing the bankruptcy.
Answer Applies to: Virginia
Replied: 3/29/2012
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
Income tax returns must be filed as normal in a bankruptcy. If money is owed it must be paid. It could be included in a chapter 13 payment plan. If If there is a refund it is part of the bankruptcy estate. To keep it it must be claimed exempt. If some instances there won't be an exemption. Consult an attorney in this regard. Probate court proceedings will continue after bankruptcy. An inheritance is part of the bankruptcy estate. Wage garnishments are automatically stayed upon filing bankruptcy. As a practical matter, provide notice of the bankruptcy immediately to the court where the garnishment is happening as well as to the creditor who is doing the garnishing.
Answer Applies to: California
Replied: 3/27/2012
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
It does not affect your taxes. The probate question is a little trickier. Debtors who are entitle to a distribution from the probate estate must report that expected distribution as an asset in the bankruptcy case. It may or may not be exempted, so you must check with a lawyer on that. Garnishments must stop immediately, however it may take some time for the Sheriff's department to process that request.
Answer Applies to: California
Replied: 3/26/2012
Tucker Legal Clinic
Tucker Legal Clinic | Samuel Tucker
If "head of an estate" means executor, administrator or personal representative of a deceased's estate, the the personal bankruptcy of the executor -or whatever- would not effect the probate proceedings. The executor is required to disclose property he receives from the estate individually. A wage garnishment should cease immediately upon filing.
Answer Applies to: Mississippi
Replied: 3/26/2012
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Bankruptcy will not affect your tax returns because your debt is discharged. The garnishment should stop almost immediately if the sheriff has been notified immediately. As far as the probate court, if you are receiving money as a beneficiary of the estate than that could be a problem and you should discuss with your bankruptcy attorney.
Answer Applies to: New York
Replied: 3/26/2012
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    You need to make sure that you can exempt the return. Tax return money is an asset. So, when you file your case you need to make sure that is an asset that you can protect or not it is subject to forfeiture to the court.
    Answer Applies to: California
    Replied: 3/26/2012
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