The answer is it depends where you live. The First, Fifth, Tenth Circuits have all adopted the  “one-day-late” rule, and now the Eleventh Circuit in Justice v. U.S. (In re Justice), 15-10273 (11th Cir. March 30, 2016) just reached the same result under an alternate theory. The end result is that if a tax return is filed even one day late, the underlying tax debt can never be discharged. This is a departure from the old rule that late filed tax returns are dischargeable if they were otherwise dischargeable and the returns had been filed at least two years prior. For those in North Carolina, which is in the Fourth Circuit the “old rule” still applies, but for how long?

​If you are looking to file bankruptcy and have a 401K, IRA, pension, or retirement plan you should be careful to make sure that asset is exempt before you file. Many retirement vehicles fall under the Employment Retirement Income Security Act of 1974 “ERISA” and are 100% exempt from creditors. That being said, never assume your retirement is exempt as the bankruptcy trustee will always require written proof. Usually this information can be found in your plan booklet which is a ~30 page document you must request from your plan administrator.

When the bankruptcy code was overhauled in 2005 a new classification was created- the Domestic Support Obligation or “DSO”. Domestic Support Obligations include, but are not limited to child support, post-separation support, alimony, and even certain attorney fees. Prior to 2005 Child Support was never dischargeable in bankruptcy and that has not changed; however the rules on spousal support certainly have. 
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