After you File for Bankruptcy (2024)

After you file for bankruptcy

Now that you have filed for bankruptcy, the Bankruptcy Court will determine how much your tax debt is reduced (if any). There are still some steps you need to complete.

Notify us about your bankruptcy to stop collections

Let us know once you have successfully filed for bankruptcy. Once we know you filed for bankruptcy, we will stop collections on your tax debt (liens, wage garnishments, or seizures).

We will not stop collections just because you hired an attorney. You need to file for bankruptcy through the courts.

Provide us with your bankruptcy case number or a copy of your petition.

Tax return filing requirements

Although you’ve filed for bankruptcy, you still have to file your tax returns.

Personal: You are still required to file personal income tax returns after filing for bankruptcy. Your bankruptcy representative may also be required to file estate fiduciary tax returns.
Business: The business is still required to file tax returns after filing for bankruptcy. If the court appoints a trustee, the trustee will file the required tax returns.

Letters from us

We may send you letters at least once a year while you’re in bankruptcy. Our letters will summarize your current tax debt, but this is not an attempt to collect during your bankruptcy.

Visit Letters for more information.

Continue to pay your tax debt

If you know that some of your tax debt will still be due after bankruptcy, you may make voluntary payments. Benefits to making voluntary payments include:

Reduce ongoing interest
Reduce tax debt owed after bankruptcy
To prevent collections after bankruptcy

Closing of your bankruptcy

Personal

When you receive a discharge from the court or your bankruptcy case is closed:

You’ll receive post-bankruptcy letter (FTB 4783) with your remaining tax debt. Pay in full or contact us to set up a payment plan.
We’ll start collection action (if applicable)
You are still required to continue to file and pay your taxes

Business

When you’re closing your bankruptcy:

Liquidation (Chapter 7)

The court appointed third party (trustee) must:

File a final tax return
Pay the minimum tax for the following tax year, if applicable
Close the bankruptcy within that same year

Reorganization plan (Chapter 11)

Once the plan is confirmed, you must follow the terms of the plan and continue to file and pay your taxes.

Liquidation plan (Chapter 11)

Once the plan is confirmed, you must follow the terms of the plan. Continue to file and pay your taxes. File a final tax return and close the bankruptcy within the same year.