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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Bankruptcy

Federal bankruptcy laws take precedence over state debts, and the Comptroller’s office may not offset held warrants for payees in active bankruptcy. Active bankruptcy means a payee has filed for bankruptcy and the case is ongoing. If the case has not been discharged (or dismissed) and closed, it is still active.

The Hold Source agency or Comptroller’s office must enter the debtor’s bankruptcy information on the TINS Bankruptcy File (BKRUPD) screen within 30 days of the warrant date to prevent warrant offset. BKRUPD records can only be added to TINS for entities:

  • Who are on hold

    –AND–

  • Whose bankruptcy is verified to be active

The debtor needs to provide the:

  • Bankruptcy case number
  • Chapter number
  • Date filed
  • Federal district court
  • Bankruptcy name

If a federal bankruptcy issues a court order against a state payee, the paying agency must set up a mail code under the payee’s TIN payable to the court.

Note: Payments to a federal bankruptcy court must be released from hold. For more information, see Hold Bypass Indicator.

See also Mandatory Deductions: Bankruptcy Court Order in Texas Payroll/Personnel Resource.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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