Thursday, January 3, 2013

Tax Time and Bankruptcy...Is My Refund Protected?


Tax time is fast approaching and a common question is “Will I get to keep my tax refund if I file bankruptcy”?  With some careful planning you should be able to protect your tax refund from the Chapter 7 Trustee when filing bankruptcy.  Several factors do come into play so it is always a good idea to consult a bankruptcy attorney with regard to your taxes and bankruptcy.

A Trustee in a debtor’s bankruptcy case can intercept a tax refund for the benefit of the creditors.  To do so, the bankruptcy must have been filed prior to receiving and spending the tax refund.  Therefore, one sure way to protect your tax refund in a Chapter 7 bankruptcy is to file bankruptcy after the tax refund has been received and spent.  It is important to note that the refund must be spent on necessary living expenses and it is a good idea to keep a list of what the money was actually used for prior to filing bankruptcy.
Even if the bankruptcy case has been filed prior to receiving your tax refund the refund still may not be taken.  Some factors the Trustee will consider:

·        How much of the refund is Earned Income Credit?  EIC is protected and cannot be taken for the benefit of creditors.
·        Does the debtor owe past tax debt?  If so, the IRS or State may be entitled to the refund to offset liability.
·        How large is the refund?  The amount must be enough to be a meaningful distribution to creditors.  In Indiana the refund typically needs to be around $1,000 or more before the Trustee will be interested in taking it.
·        Can the debtor exempt any of the refund?  In Indiana each individual debtor may exempt up to $350 of intangible property.  Therefore, part of the tax refund may be exempt depending on how much other intangible property was owned by the debtor when the case was filed.
·        When was the bankruptcy filed?  The amount of the tax refund allowed to be administered by the Trustee is pro-rated over the year.  Therefore, the Trustee may only be able to take 75% for instance.

The rules can change from state to state and Trustees’ decisions can vary regarding the tax refund.  Therefore, to ensure your tax refund is protected when filing Chapter 7 bankruptcy, consult a local bankruptcy attorney.  A bankruptcy attorney will be able to determine when the best time to file will be and can give advice on how to spend the refund prior to filing the bankruptcy case.


If you have questions regarding bankruptcy in Indiana please contact Jackson & Oglesby Law at (877) 489-0908 or visit us at www.IndyBankruptcyLaw.com. Jackson & Oglesby Law can assist you with all aspects of your bankruptcy case. If you have questions regarding Chapter 7 bankruptcy, Chapter 13 bankruptcy, stopping foreclosure or wage garnishment, avoiding liens, stopping law suits, discharging debt, etc. we can help! Please call us today for your free phone consultation to determine which bankruptcy may be right for you.

11 comments:

  1. Milwaukee Bankruptcy Lawyer has shared many information that is helpful for us that has some issues regarding bankruptcy. We should know it and that is why they shared it. But we needed their assistance to have this. Their specialty is what we need in this situation.

    http://burrlawoffice.com/

    ReplyDelete
  2. Hi, once I file chapter 13, how do I file a plan modification for emergencies that come up in order to keep my tax refund? What rights come into play here?

    ReplyDelete
  3. We received our 2012 tax refund in Feb of 2013 then in April 2013 we filed chapter 7. They did not make us pay any of our 2012 refund. Now that we are filing taxes for 2013, can the trustee take our2013 refund ?

    ReplyDelete
  4. Spend the refund on personal and business development החזרי מס seminars or mentoring programs or audio tapes — actions that could lead to bigger success and earnings over time, בדיקת החזרי מס Invest in yourself to get ahead of the competition.מס שבח Spend it on getting healthy or more physically fit. Spend it on a vacation. Wait, how is that an investment.contineu reading and visit our site to get more information in our service, www.helem.org.il.

    ReplyDelete
  5. Corporations and partnerships must have an attorney to file a bankruptcy case. Individuals, however, may represent themselves in bankruptcy lawyers Las Vegas.

    ReplyDelete
  6. Thanks for sharing such kind of nice and wonderful information.With some careful planning you should be able to protect your tax refund from the Chapter 7 Trustee when filing bankruptcy. Several factors do come into play so it is always a good idea to consult a bankruptcy attorney with regard to your taxes and bankruptcy.Bankruptcy Lawyer

    ReplyDelete
  7. Do you need Personal Loan?
    Business Cash Loan?
    Unsecured Loan
    Fast and Simple Loan?
    Quick Application Process?
    Approvals within 24-72 Hours?
    No Hidden Fees Loan?
    Funding in less than 1 Week?
    Get unsecured working capital?
    Contact Us At :majidvijahlending@gmail.com

    LOAN SERVICES AVAILABLE INCLUDE:
    ================================
    *Commercial Loans.
    *Personal Loans.
    *Business Loans.
    *Investments Loans.
    *Development Loans.
    *Acquisition Loans .
    *Construction loans.
    *Business Loans And many More:

    LOAN APPLICATION FORM:
    =================
    Full Name:................
    Loan Amount Needed:.
    Purpose of loan:.......
    Loan Duration:..
    Gender:.............
    Marital status:....
    Location:..........
    Home Address:..
    City:............
    Country:......
    Phone:..........
    Mobile / Cell:....
    Occupation:......
    Monthly Income:....

    Contact Us At :majidvijahlending@gmail.com

    ReplyDelete
  8. Hello,
    Interesting blog... Thanks for sharing the blog and keep sharing the good information.
    Chapter 7 NJ

    ReplyDelete
  9. Hello Everybody,
    My name is Mrs Sharon Sim. I live in Singapore and i am a happy woman today? and i told my self that any lender that rescue my family from our poor situation, i will refer any person that is looking for loan to him, he gave me happiness to me and my family, i was in need of a loan of S$250,000.00 to start my life all over as i am a single mother with 3 kids I met this honest and GOD fearing man loan lender that help me with a loan of S$250,000.00 SG. Dollar, he is a GOD fearing man, if you are in need of loan and you will pay back the loan please contact him tell him that is Mrs Sharon, that refer you to him. contact Dr Purva Pius,via email:(urgentloan22@gmail.com) Thank you.

    BORROWERS APPLICATION DETAILS


    1. Name Of Applicant in Full:……..
    2. Telephone Numbers:……….
    3. Address and Location:…….
    4. Amount in request………..
    5. Repayment Period:………..
    6. Purpose Of Loan………….
    7. country…………………
    8. phone…………………..
    9. occupation………………
    10.age/sex…………………
    11.Monthly Income…………..
    12.Email……………..

    Regards.
    Managements
    Email Kindly Contact: urgentloan22@gmail.com

    ReplyDelete
  10. Hello,
    Interesting blog... Thanks for sharing the blog and keep sharing the good information.
    NJ Bankruptcy Attorney

    ReplyDelete
  11. Nice information keep going like this.I am an experienced attorney offering high-quality civil litigation skills, combined with good business judgment and open communication.Foreclosure attorney NJ

    ReplyDelete