Chattanooga Bankruptcy Attorneys Clark & Washington Explain How Filing for Bankruptcy Affects Your Taxes

    CHATTANOOGA, TN, May 08, 2015 /24-7PressRelease/ -- The most common type of bankruptcy procedure filed by individuals is the Chapter 7 bankruptcy. Chapter 7 filers usually do not have the means to pay for all or even a portion of their debt. After the filer completes the necessary requirements, the debts are liquidated, giving the filer a fresh financial start. However, Chattanooga bankruptcy lawyers Clark & Washington note that some filers have the ability to pay off some or all of their debts over time. These individuals usually file for Chapter 13 bankruptcy so that their debts are reorganized and they are given a specific length of time to pay their debtors.

A bankruptcy filing will not typically affect your income tax return. This is because under income tax rules, debts discharged in a bankruptcy proceeding are excluded from your income. However, this Chattanooga bankruptcy attorney reminds tax filers that they must still include in their tax filing any taxable amount of a cancelled debt for which they remain personally liable.

If your debt was secured by a property and the lender took full or partial possession of the property as satisfaction of your debt, the IRS will take this to mean that you have sold the property. This means you may have incurred a taxable gain or loss from the deemed sale of the property.

Filing for bankruptcy can be complex and confusing. It is advisable to seek the services of a knowledgeable bankruptcy attorney when filing for taxes for a tax year for which you also declared bankruptcy. The Chattanooga bankruptcy lawyers at Clark & Washington have the experience to assist you with any kind of bankruptcy proceeding. Get in touch with them right away and take control of your financial life once again.

To learn more, go to http://www.Chattanooga-bankruptcy-attorney.com/.

Established in 1983, Clark & Washington is now one of the leading bankruptcy filers in the Southeast. They have locations in Georgia, Florida and Tennessee. Clark & Washington specializes in personal chapter seven and 13 bankruptcy. They offer honest, helpful legal advice to those experiencing financial hardships.

For more information, visit http://www.Chattanooga-bankruptcy-attorney.com/.

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