Filing taxes is a part of life, no one likes it, but unfortunately, we (almost) all have to do it. Filing your taxes can sometimes be a difficult and confusing experience. You may think filing your taxes will be even harder if you’ve filed a bankruptcy, but that is not always the case.
In general, when you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you can file your taxes as you normally would. However, a common question asked by Chapter 13 clients is, “Will I still receive a form 1098 from my mortgage company showing the interest that has been paid on my mortgage and can I claim that deduction on my taxes?” The answer is yes, you should still receive form 1098 from your mortgage company. The mortgage company typically sends that form directly to you, but sometimes it might get sent to your attorney.
Another common question when it comes to bankruptcy and taxes is, “I received a form 1099 for a debt that was included in my bankruptcy. What do I do?” Luckily, if you’ve filed a bankruptcy MOST debts that were discharged in your bankruptcy cannot be counted towards your earned income and will not cause any negative tax consequences. If a form 1099 is received after you have filed a bankruptcy and the debt referenced in the form 1099 was included and discharged in your bankruptcy you will want to fill out form 982 to send along with your tax return. For more detailed information check out our blog post on Form 982.