Bankruptcy

Bankruptcy helps people who can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect financially troubled businesses.

Learn more about bankruptcy on the US Courts Bankruptcy page.

Bankruptcy and Tax Debt

After you declare bankruptcy, you may still owe a tax debt. When we receive notice of your bankruptcy closure from the United States Bankruptcy Court, we will send you a letter with the amount of taxes due including penalties and interest.

You will have 30 days from the date on your letter to pay this amount or to request a payment plan.

Bankruptcy and Tax Returns

After declaring bankruptcy, you are still required to file tax returns, and your bankruptcy can be impacted for non-filed returns before and after you file for bankruptcy. For more information on filing your tax return see:

Bankruptcy and Tax Refunds

If you become eligible for an income tax refund during your bankruptcy, there are two things to keep in mind:

  • Only paper refund checks are issued during the time your bankruptcy is open.
    No electronic deposits can be made.
  • Most tax debts are not discharged by your bankruptcy and may still be collected as part of a refund offset.

For more information on the types of bankruptcy and what debts may remain after bankruptcy, please see the US Federal Courts Bankruptcy page.

Other Resources

If you have more questions about how bankruptcy affects your Montana state tax debts, please contact our Bankruptcy Unit by emailing DORBankruptcy@mt.gov.

Tammie Chenoweth

Phone
(406) 444-5849
Email
TChenoweth@mt.gov

Marci Ballard-Gohn

Phone
(406) 444-5875
Email
MGohn@mt.gov

Please remember, our staff cannot provide legal advice. Please seek competent legal counsel.