Filing Chapter 11 Bankruptcy on Georgia Sales Tax

Chapter 11 Bankruptcy & Georgia Sales Tax

If your Georgia sales tax certificate of registration has been revoked in the Atlanta area and the GDOR has rejected your installment agreement, Chapter 11 Bankruptcy may be your only option. A payment plan for unremitted sales tax is usually your only bite at the apple. Once you default on your payment plan, it is completely within the GDOR’s discretion to allow you another chance. This is usually based on your track record and credit history.

Your business can file Chapter 11 bankruptcy on sales tax owed to the GDOR. With the new law of sales tax evasion in Illinois, not paying back unremitted sales tax is a felony and punishable by time in prison. Bankruptcy should always be used as a last resort, when all other options of collecting money from family, friends, banks, and other commercial lenders have failed.

Filing for Chapter 11 bankruptcy on sales tax owed to the GDOR provides the debtor with an automatic stay of protection. The business will incorporate all of its debt, not just sales tax, and propose an offer of payment to the U.S. Bankruptcy Trustee.

Call our law firm to discuss your options to file a Chapter 11 bankruptcy.

Documents Required for Chapter 11 Bankruptcy

Chapter 11: Individual Filings

1. All monthly billing statements and collection agency correspondence and notices received within the prior 90 days for all bills (mortgage, car, credit cards, bank loans, medical, student loans etc.) other than utilities (unless there is a utility bill default), and monthly billing statements for all corporate bills for which you have personal liability
2. A list of personal property and household furnishings (item by item) with a valuation for each item representing the current value of the item
3. Current account statements (bank, brokerage, financial, deferred compensation, pension, 401k, IRA, Education IRA or other account) for the prior 6 months
4. All current paycheck advice(s) or stub(s) and sources of income for the prior 6 months for yourself and your spouse, if any
5. All life insurance policy statement(s)
6. Motor vehicle, motorcycle, boat & other titles
7. All deeds showing ownership of your residence or any other real property
8. Copy of all appraisals of your residence or any other real property within last 2 years
9. Prior two (2) years Federal 1040 income tax returns and amended returns
10. Copy of any foreclosure suit, other lawsuit or legal proceedings filed or pending within last year
11. Copy of any personal injury suit, workmen’s compensation suit or itemization of claim against any third party
12. Copy of any current personal or real property lease(s)
13. Information or itemization of any other personal property or real property not otherwise provided
14. List of any prior addresses in last two (2) years and dates of occupancy
15. List of payments totaling in excess of $600.00 to any single creditor within the prior 90 days and the date(s) and amount(s) of payment(s) made
16. Monthly family budget
17. Copy of your driver’s license and social security card
18. A Credit Counseling Certificate received from an approved credit counseling agency within the prior 180 days and a copy of the debt repayment plan, if any, developed by the approved credit counseling agency for you (e.g., hbcce.org)

Chapter 11: Entity Filings

1. All account payables, monthly billing statements and collection agency correspondence and notices received within the prior 90 days for all payables (mortgage, car, credit cards, bank loans, trade credits, etc.)
2. A list of property (item by item) with a valuation for each item representing the current value of the item
3. Current account statements (bank, brokerage, financial, pension, or other account) for the prior 6 months
4. All insurance policy statement(s)
5. Motor vehicle & other titles
6. Prior two (2) years Federal income tax returns and amended returns
7. Copy of all lawsuit or legal proceedings filed or pending within last year
8. Copy of any real property or personal lease(s), including equipment and service leases
9. Information or itemization of any other personal property or real property not otherwise provided
10. List of payments totaling in excess of $5,850.00 to any single creditor within the prior 90 days and the date(s) and amount(s) of payment(s) made
11. List of all payments to officers and insiders in the one year prior to filing
12. List of Accounts Receivable
13. All financial statements issued in the last two years

Frequently Asked Questions

What is Chapter 11 bankruptcy and how does it help with Georgia sales tax debt?

Chapter 11 bankruptcy allows businesses to reorganize their debts, including sales tax owed to the Georgia Department of Revenue (GDOR). It provides an automatic stay of collection efforts and gives the business a chance to propose a structured repayment plan under court supervision.

Can I file for Chapter 11 bankruptcy if my sales tax payment plan was rejected by the GDOR?

Yes, if the GDOR has revoked your sales tax registration and denied a new payment agreement, Chapter 11 may be a viable last-resort option to manage and restructure the debt while avoiding severe penalties.

Does Chapter 11 bankruptcy eliminate sales tax debt?

No, it does not eliminate the debt but allows it to be reorganized. You’ll still be required to repay the tax debt through a court-approved plan, which may extend payments over time and stop aggressive collection actions.

What documents are required to file Chapter 11 bankruptcy?

You’ll need financial documents such as tax returns, account statements, property valuations, leases, payroll information, and details of any lawsuits or prior large payments. Requirements differ slightly between individuals and business entities.

Is not paying sales tax considered a crime?

Yes, especially under new laws like those in Illinois, failure to remit sales tax can be treated as a felony, potentially leading to prison time. This underscores the seriousness of addressing sales tax debts proactively.