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Chapter 13 Bankruptcy – Voluntary Reorganization of Debt for Individuals

Chapter 13 bankruptcy is only available to wage earners, the self-employed and sole proprietors (one person businesses). To qualify for Chapter 13, you must have regular income, have filed all required tax returns for tax periods ending within four years of your bankruptcy filing and meet other requirements set forth in the bankruptcy code.

To take full advantage of the bankruptcy laws and get a fresh start, it is important that you do not continue to incur additional debt. If all or part of the reason you are filing bankruptcy is overdue federal tax debts, you may need to increase your withholding and/or your estimated tax payments. For help determining the proper withholding, visit our online Withholding Calculator. For help with your estimated taxes, visit our Estimated Taxes page. 

Find basic information about Chapter 13 bankruptcy below. For more detailed information see the U.S. Courts Bankruptcy Basics web page.

Federal Tax Refunds During Bankruptcy

You can receive tax refunds while in bankruptcy. However, refunds may be subject to delay or used to pay down your tax debts. If you believe your refund has been delayed or offset against your tax debts you can check on its status by going to our Where’s My Refund tool or by contacting the IRS’ Centralized Insolvency Operations Unit at 1-800-973-0424. The unit is available Monday through Friday from 7:00 a.m. to 10:00 p.m. eastern time. 

Discharge

If you successfully complete your bankruptcy plan you will receive a discharge of debt. A discharge releases you (the debtor) from personal liability for certain dischargeable debts. Some taxes may be dischargeable. Whether a federal tax debt may be discharged depends on the unique facts and circumstances of each case. Consult your bankruptcy attorney to determine which tax debts may be discharged.

General Tax Questions

Please note: We cannot provide legal or other advice about your bankruptcy case. If you have questions about filing and paying your federal taxes you can find answers here on our website and in the list of related topics on the right side of this page. If you want to speak to someone at the IRS please call:

  • Individuals – 1-800-829-1040
  • Businesses – 1-800-829-4933

For additional tax information on bankruptcy, refer to Tax Withholding and Estimated Tax (PDF), Publication 908 Bankruptcy Tax Guide (PDF), and Publication 5082 What You Should Know About Ch. 13 Bankruptcy (PDF).

 

Page Last Reviewed or Updated: 20-Mar-2014