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Can you file for a tax refund while in a chapter 7 bankruptcy?
Filing Return While in Bankruptcy Yes, you still have to file your taxes as usual. Any refund will probably be appropriated by the trustee and treated as a nonexempt asset, which will be used for repayment of creditors. Adding As indicated, this is one of your assets and must be disclosed to the creditors committee as something they can use to pay your debts. They will probably ask about it if you don't provide it. They've seen it many times before.
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Yes. For 3 years. They do not take it all. You will get to keep your EIC and certain other credits that may be given that year. This is per my bankruptcy lawyer.
Answer Yes, with the exception of moving from the state where the bankuptcy was filed unless there is a good reason such as a job transfer.
Answer The answer depends on who the creditor is and the status of the debt. If the debt was a student loan or other non-dischargable debt, then your tax refund …can be taken. If the debt WAS discharged, ANY collection action of any kind on a discharged debt is a violation of the permanent injunction of the discharge and therefore illegal. If the creditor was not included on the creditor matrix, then informing them of the bankruptcy and discharge of the debt may be all that is necessary to have the refund returned to you. In other cases it may be necessary to file a Motion for Contempt against the creditor in bankruptcy court. This would require the re-opening of the bankruptcy.
In the state of Ohio is a chapter 7 bankruptcy trustee entitled only to the portion of a tax refund from the date of the bankruptcy filing.?
Answer Depending upon the amount of time between the filing of the BK and the filing of the tax return; a refund may be pro-rated to determine the portion that is inclu…ded as a BK asset. And if anything, the portion to be taken by the trustee is the part relative to before the filing. Follow: Pre petiton assets and liabilities are in the BK. Taxes withheld from earnings are basically money put on deposit with the government, to pay the tax due/payable later on. Just like any other "savings" account. Had you had the 'correct" amount withheld (instead of too much, causing a refund), the additional you received would have been available for to pay those creditor/debts. Earnings (and hence tax overpayments) from after the filing are not part of the BK.
Answer A tax refund is considered income/asset belonging to the BK petitioner and is therefore subject to seizure for the repayment of debt. Whe…ther or not the refund can be included in the BK depends upon the time frame of the BK filing vs. the tax refund date and amount, the status of the refund (joint, subject to child support action, etc.) and so forth.
Answer This Q has been pushed around a lot here...and this is what I've pieced together: It depends...a bit on which circuit court your in and how they feel.…..and expecially how much is involved...(obviously large amounts are wanted for creditors...and it just seems unfair for you to not pay someone your debt, because you didn't have the money, because you had too much withheld or prepaid...when the amount withheld/prepaid is controllable and returned to you!) The other aspect is when you filed compared to when you made your money...If the overpaid tax is for a pre-petition filing period...most trustees want it...but if it really isn't then it's yours. So say it's a refund for the year and you filed BK in December.....well it was basically all withheld as part of the Jan-Dec period in your filing...and it part of the BK...but if you filed in say March...well not much of it is really from the covered BK period. Sort of makes sense.
Until you file, your money is yours to use. Financial counseling would be an excellent choice.. However, you have debt obligations you promised to pay...that would be a good …honorable place to use it. (If you don't think doing the honorable thing is important, then don't complain when others don't care about what harm they do to you). Anything you do for some extended time, especially using any asset or trying to make a benefit, before BK can be challenged in the BK (and reversed, etc.)...as being done preferentially in anticipation of BK. And here to, the BK Court doesn't like anyone doing those things, so they may decide to not be as favorable to you as they could be. (And if you swear to them you didn't act that way (and you will be swearing to it), and they can see you did..well that can be criminal purjery).
Depending on some things, like when the tax was paid and when the BK was filed, the refund is like any other asset and available to creditors. The trustee or court would… take it and pay it to creditors according to their standing in the case.
Does a tax refund automatically get sent by the IRS to bankruptcy court after a chapter 7 discharge?
No. Everything that happens in a bankruptcy case goes through the (7 or 13) trustee and if the trustee has not acted to get the refund, but has told you it must be sent …to him/her, that is your obligation when you receive it. If the trustee did not know about the refund, and you omitted that information from your schedules, you may find your bankruptcy dismissed with prejudice, so you will not be able to re-file it for a while. If you owe the IRS back taxes, they may intercept it. Then it will depend on whether the taxes were or will be discharged. Talk to a lawyer.
Very likely...the refund is because you had more money than needed withheld from your paycheck and pu in (essentially) a savings account at the IRS to pay your eventual …liability. This money, earned and saved pre-filing, had you not had it put aside (or had you correctly estimated and completed the W-4 so the right amount was withheld), would have been available to pay the creditors. You know, you could literally have had 100% of your pay withheld....think it makes sense youc could get and keep it after filing BK? Of course, as BK is Federal Law, and in a FEDERAL court, the State makes no difference. And of course, the Court has some discretion in these things too.
You can't "exempt" anything.
If received for last year yes. the one for next year, received after filing, no.
You may get it, but you will have to turn it over to the trustee. It may shorten your plan payment time period.
Technically yes and no. You could 'convert' your case to a chapter 7, but that would mean you have to meet the conditions for a chapter 7 case. Which involves wages being a ce…rtain amount; and the like. No. You can only have one bankruptcy open at a time. If your financial situation worsens, or you have a short-term drop in tour income, you can suspend or withdraw your chapter 13, or convert to a chapter 7. If the secured debt arrears have been paid, usually in the first year of a plan, you may be able to terminate the chapter 13 and get a discharge. This is a very complicated area of bankruptcy, so consult an experienced local bankruptcy lawyer.
I assume you mean "how do you keep your tax REFUND when you file a chapter 7 bankruptcy?" A tax refund is an asset of the estate and, generally, the trustee will take it. Ther…e are two ways to avoid this, first way would be to delay filing your bankruptcy petition until after you have gotten your refund and spent the money. The second way is to declare part or all of the refund to be part of your exemption, however exemptions are small and most people have other assets (like computers, wedding rings, paychecks, etc.) they want to protect with their exemptions.
Whether you are entitled to your tax refund will depend on what type of Chapter of bankruptcy you are filing and whether the bankruptcy exemptions can be used to protect the t…ax refund. If you are filing for Chapter 7 bankruptcy then you can generally keep the refund if the available state bankruptcy exemptions provide protection for it. If you are in a Chapter 13 bankruptcy you are typically required to turn over the tax refunds during the life of the Chapter 13 case.
The tax refund goes into the bankruptcy estate. If your chapter 7 filing did not exempt the refund, the money will be used to pay the trustee and to pay your debts pro rata. T…hat is, each creditor gets an amount equal to the percentage the debt is to the total indebtedness. You are not likely to get anything back, but if all the debts are paid off 100 per cent and the trustee is not entitled to any more money, the balance will be paid to you. The trustee should have decided what s/he is going to do. If you have a lawyer, s/he should discuss it with the trustee. You can also talk to the trustee or your case manager. I doubt you will get any of the refund, but make sure to stay on top of the issue and get notices of any trustee motions regarding these funds.