Income Tax Debts

Income Tax Debts

22 Jun Income Tax Debts

Most people don’t realize that income tax debts are unsecured debts in both Proposals and Bankruptcy proceedings.  In fact, income tax debt owing right up to the filing of the Proposal or Bankruptcy are included.  For example, if someone is self-employed and files Bankruptcy March 31, 2012, then the Trustee files a “Pre-Bankruptcy” Tax Return for the period January 1, 2012 to March 31, 2012; and any income tax owed is part of the debts of the Bankruptcy.  In a Proposal, the same type of information is filed.