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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2884
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I have been wondering how our Chapter 13 bankruptcy will affect

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I have been wondering how our Chapter 13 bankruptcy will affect our taxes. We are on a fixed income, make monthly payments to a trustee, are moving and going to have to surrender our home in the next few months. We have not been making our house payment since June 2010, so our interest deduction amount will be about a third of the usual amount. We usually get back around 1200-1500 on our return. Is there anything else that will change, or that we will have to claim or deduct on our taxes this year due to our Chapter 13?

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

There is no special form or anything regarding filing your taxes that is impacted by the bankruptcy case. no special deductions or applications.

Terry L. :

check with your bankruptcy attorney and the plan/confirmation order to see if you have to turn the returns over to the trustee. They often request them, and sometimes require you to pay in a portion of your refund, but not always.

Terry L. :

Thanks for your question, any others?

Customer :

Yes, I remember we do have to turn over any money that is refunded. I am glad to hear there isn't anything we have to claim as a gain type of thing as far as the forgiveness of debt, is that correct?

Terry L. :

yes, you are getting a court order discharge at the end, the lenders are not forgiving debt. they will get a tax break on any losses they have.

Terry L. :

good luck.

Terry L. and other Bankruptcy Law Specialists are ready to help you