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Apr 2012

Chapter 13 Bankruptcy–Need to Send in Your Tax Forms

Posted by / in Virginia Bankruptcy / 4 comments

My name is Lori Rupp and I’m Mr. Weed’s Chapter 13 paralegal.

I’ve been a bankruptcy paralegal since 1998 and before I worked for Mr. Weed I even worked for a Chapter 13 Trustee in Michigan for two years.

Chapter 13 bankruptcy is more complicated than a Chapter 7 bankruptcy in a lot of ways. One of those ways is you are required to send the Chapter 13 Trustee a copy of your tax return every year while you are in the bankruptcy.

Here are the rules about your taxes in Chapter 13:

1. You are required by law, 11 USC 521(f)(1),  to send the Chapter 13 Trustee a full copy of your federal and state tax returns every year that you are in bankruptcy. That means the returns themselves and all the attached schedules. It doesn’t matter if you owe or are getting a refund, you have to send a copy of the return no matter what. The Court doesn’t remind you and the Trustee doesn’t remind you. You are just supposed to remember to do it on your own.

2. You are not allowed to file for an extension on your taxes while you are in bankruptcy. You are required to file your taxes on time every year.

3. Depending on which Judge you have, you might be required to send the Trustee any refund you receive over $250.00. If you have any questions about sending your refund to the Trustee you should contact me and I can help you.  (But you need to send in the tax forms, even if there is no refund!)

Last year, a lot of people didn’t send the Trustee copies of their return. As a result, the the Chapter 13 Trustee, Thomas Gorman,  filed motions to dismiss all of those cases. That left us, and the people who hadn’t sent the returns in on time, scrambling around at the last minute trying to stop their case from being dismissed when the whole thing could have easily been prevented by sending the returns in when they were required.

One Judge joked about the guillotine for people in chapter 13 who don’t send in their tax forms.

And the Judges were mad! They were not sympathetic because they expected everyone to be responsible and send their taxes in on time.  The Judges did not know before that this had been such a problem, and they said it better not be a problem again.

Judge Robert Mayer said his answer to excuses would the “the guillotine.”   (Only a joke, of course, but a joke that means he is really mad!  Usually, Judge Mayer is a very patient guy.)

So this year, we’ve become more involved in making sure everyone gets their tax returns to the Trustee. In February, we sent out a letter to all of our Chapter 13 clients asking them to send their tax returns to me. That way, we can keep track of who sent their returns in and who didn’t and I can send the returns to the Trustee via UPS with a tracking number so we know they are received. We don’t want to have to scramble around again this year like we did last year!

After the February letter, some people sent me their taxes but a lot didn’t. They have continued to trickle in but we are still missing returns for more than half of our clients and they are due today! Since we haven’t gotten the response we had hoped for Mark Sullivan, the attorney who’d have to go to Court on the motions to dismiss, has started calling people reminding them they need to send their taxes in.

We do not want your case to get dismissed over something as simple as sending your tax returns to the Trustee.

So if you haven’t already, please send a complete copy of your 2011 Federal and State taxes to me immediately so I can check your name off my list and forward them to the Trustee.

You can fax them to me at (703) 635-2848, you can email them to me at [email protected].

It’s really important that this get taken care of right away!


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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

  • Kay

    April 8, 2013, pm30 12:26 PM

    I am going on my 2nd year of my BK 13 and not once has my lawyer nor the courts have asked that I submit my tax returns. The only time they wanted to see my tax returns is when I filed in May 2011. My attorney acts as if he is too busy most time I have tried to contact him. Should I go ahead and submit my returns form 2011 and 2012 to the trustee? I have completed my taxes and I owe this year. Will the amount I owe be included in my BK13 or should I pay that separately through a payment plan with the IRS?

    • Robert Weed

      April 8, 2013, pm30 2:13 PM


      Well, your lawyer should know. Maybe your court has a local rule or something saying you don’t have to. I don’t know.

      The amount you owe this year is supposed to be paid promptly by you. The IRS can ask that it be included in a higher Chapter 13 plan payment. The IRS can ask to throw you out of Chapter 13 if you don’t pay. I do not THINK they will work out a payment agreement with you–but you obviously can just start sending in payments if it’s not an impossible amount.

  • angie

    July 17, 2013, am31 12:37 AM

    While in bankruptcy does your income tax refund take away from your balance ? Could you help you pay your plan off sooner ?

    • Robert Weed

      July 17, 2013, pm31 2:33 PM


      That varies by court and by individual judge. So I can’t answer that other than what they do here. Sorry, should be a consistent rule for that, but there’s not.

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