Bankruptcy Frequently Asked Questions

Yes, if your Bankruptcy case is open and pending, the NCDOR will not hold or offset your refund to any outstanding liability.

Yes. 

The Bankruptcy only protects you for liabilities incurred up to the date you file bankruptcy. From your bankruptcy petition date forward, you are required to file and pay all states taxes as they become due.

The Department will not agree to an installment payment agreement if you are still in a current pending bankruptcy case.

If you choose to voluntarily send payments to the Department, you may send them to the following address:

There are a few reasons, depending on your specific situation. 

You should contact the Bankruptcy Unit at (919) 754-2542 to verify that the Department received notice of your bankruptcy filing. 

• If we have received notice of your filing, upon its completion you will receive either a dismissal or a discharge from the courts.

Here's a brief explanation of the terms:

• A Dismissal will allow all liabilities not paid during the bankruptcy to immediately return back to active collections.
• A Discharge has certain exceptions that allow some liabilities to return to active collections. Below is a list of the most frequent items. This list is not all inclusive; it is a list of the exceptions seen most often. These items will return back to active collections at the order for discharge.
  • Trust fund taxes (i.e., Sales and Withholding taxes)
  • Income taxes last due (including extensions) within 3 years before the petition date
  • Liabilities due to unfiled or fraudulent tax returns

Consult your legal counsel to address specific questions regarding a dismissal or discharge.

If you are currently in an active bankruptcy, please mail tax returns to the following address:

A discharge in bankruptcy provides relief to the individual debtor in the bankruptcy case. 

It does not provide relief to the property. 

• For this reason, a CTL will remain in place until it is satisfied upon sale of the property.

Contact the Department’s Bankruptcy Unit immediately at (919) 754-2542 to verify that we have received notice of your bankruptcy filing.

Once we receive notification of your bankruptcy filing, your garnishment will be released. 

• Payments that were garnished AFTER the petition date may be refunded upon written request.