What would you like to do?
If you receive a tax refund in January and spend it all and then file bankruptcy in February can the trustees make you pay back the refund?
No. But it could possibly depend on whether or not the BK was accepted. Dependent on how much the refund was and what it was used for. In general, only the assets that you have at the time you file are included, not monies already spent.
No, But if you file, next year you will possabily have to pay half of your tax money.
Why would I have to pay half of my tax money on next years taxes?
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You need to discuss this with your attorney. Once you receive your tax refund, it's part of your personal assets that could be seized to pay creditors. If you file bankruptc…y before you get your taxes then the government will keep your tax refund and put it towards your debt. The bankruptcy court has 1 year to go back and open your case even after your bankruptcy has been discharged. If you can prove that the money is needed/used for catching up rent or other nessacery bills they will not take it.
Answer I think it depends on when the bankruptcy is discharged, but it would be discussed at your meeting with the creditors and the trustee. If it wasn't discussed…, then the refund is yours.
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.
If you received a sizeable tax refund but spent it before you filed bankruptcy will that money affect you?
Answer The judge may ask you what it was spent on. Necessities such as food, shelter, utilities etc. are acceptable and a usual answer. You did the right th…ing. Receive and spend the refund before filing bankruptcy, if possible. Of course, is not always possible due to the stress from pressure by creditors. You should weigh the relief bankruptcy provides against the amount of stress you can live with.
Answer . Though no one "wants" to file bankruptcy, your question is valid. An income tax return is usually looked at as a lump sum of money to help get back on one's feet. …A down payment for a better car, a vacation for a family, etc. If you file a chapter 7, then no, you will not have your tax refund kept from you, UNLESS you owe back-taxes. Depending on how many years you may have owed taxes, you can also file bankruptcy on those. If you have to file a chapter 13, bankruptcy, then I am not sure. Ask your attorney, and a consultation with a bankruptcy attorney is usually free.. Answer . It is a good idea to check with your lawyer on this question because it may depend on what state you life in when you filed. I live in Pennsylvania and did indeed receive my refund. My sister, however, lived in New Orleans when she filed her taxes and moved back to Pennsylvania shortly thereafter. Within two weeks of receiving her refund, she received a letter from her tax office telling her she had to return the check to be applied to her bankruptcy creditors. She was even given a date that the check had to be returned by.. Answer . A lot of times the Trustee will order you to pay the refund to the courts to be distributed to creditors. I've seen this happen in Chapter 7 cases before.. 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 especially 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 entirely controllable by you! The withheld tax account at the IRS is really nothing more than a savings account to pay for the tax actually determined to be due).. The other aspect is when you file for BK 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 you can argue it's post petition and yours.. So say it's a refund for the past year and you filed BK in December.....well it was basically all withheld as part of the Jan-Dec period in your tax return...and its part of the BK...but if you filed BK in say March...well not much of it is really from the covered BK period - and much of the overpayment should be given to you. (Of course, things like not making $ or deductions evenly through the year can complicate the calculation). . Sort of makes sense.
Answer Generally it depends on the type of BK when or if it has been discharged, the amount of the refund, and if it is a federal or state bankruptcy filing…. As a rule at least a portion of the refund will be taken by the trustee, more likely the entire amount is subject to relinquishment.
Answer . You could, but they will find out about it and if you don't use this money to try and pay creditors then you could be in hot water. I would get some legal advice… on this and meanwhile, put that money in an interest bearing account and don't touch it.\n. \nMarcy\n. \n . \n If the refund is received 60 days or less before the filing the entire refund is considered assets that must be included in the BK filing. If it is received more than 60 days before the filing the amount subject to BK is pro-rated.
Can the Bankruptcy trustee include as part of your estate Tax Refunds which were received prior to the filing of your bankruptcy petition?
Answer The quick answer would be no. Any money received prior to filing would not be included in your bankruptcy estate and this, not recoverable by the trustee. Any mo…ney still owed to you would be part of the estate and would be collectible. What I would want to know is if the money was completely spent or otherwise exempt on the day you filed. ans I disagree, and really don't understand the above. Any asset you had or had a right to (that would include everything you received, or things you have yet to receive - like tax refunds for overpayment of taxes) from earnings made PRIOR to your filing date are part of the BK estate. They are available for use to pay the liabilities or debts incurred or due from the PRIOR to filing periods. I do not understand why you would think a tax refund you received prior to filing BK would be exempt? The earnings from prior to BK, or savings accounts established prior to BK aren't. All your refund is - is an overpayment of the estimated payment of taxes for those periods...had you had the correct amount withheld (or estimated) for the tax...and had this same extra amount deposited and saved in a US Bank (instead of with the US IRS), you would agree it was available to the estate for creditors wouldn't you?
Yes, they will take some of it. Speak with an attorney about your specific situation. If you can not find an attorney, contact your local Bar association and they will refe…r you to one.. ans . Probably all of it. It was all from earnings and overpaid before you filed - pre-petition. Had you had the correct amount withheld, the excess would have been availale to pay the debt.
This question has been discussed many times here..and there seems to be no hard and fast rule. Certainly, it depends on several things. Most importantly, is what perio…d the overpayment reflected in the refund really realtes to. For example, say it is a refund for a year and you filed BK in Dec of that year. Basically, all of the tax you paid in was from pre-petition...had you had the correct amount withheld (or by estimated payment, hence no refund of overpayment being made), presumably (and rightfully) that additional amount would have been available to pay those creditors. Consider, you could have had more (even 100%) withheld and deposited in your account with the Government, that shouldn't mean you get to essentially just withdraw it now. (Had you put it in a bank account you wouldn't expect to). On the other hand, if you file the BK in January, then virtually all the overpayment is due to earnings post petition...which are actually yours and not part of the bankruptcy. Viewed this way, I think the actions make some sense. Add in any complications, like you don't make earnings evenly through the period...and it's a question needing a reasonable solution you should propose to the trustee.
Very likely...the money being refunded is from what you overpaid into, essentially, a savings account at the IRS with your name on it. Had you had the correct amount wit…hheld, the extra in your check would have rightfully been available to pay your debts with then (before filing BK). It is a pre-petition asset...like any bank account or such. You could have had much more withheld from your check easily, paid even fewer obligations....and then had a bigger refund...that doesn't mean you should get to keep it while others go unpaid. In reality, many trustees ignore small amounts of refund.
I know Ohio is an exceptionally sepcial place...able to make laws to control the debts and contracts you have with people and business all over the country! Sure the name on t…he buidings your having all this done in don't say FEDERAL?
If received for last year yes. the one for next year, received after filing, no.
Tax Refunds and Returns There is no specific protection for tax refunds in bankruptcy. As such, the "wild card" exemption* is used to try to protect these funds as much as pos…sible. Further, any portion of your tax refund that pertains to the "earned income credit" is also fully protect and yours to keep. In a Chapter 7 Bankruptcy, you may lose all or part of your tax refund due for the tax year in which you filed your bankruptcy. For example, if you file for bankruptcy in 2009, your Trustee may be entitled to all or part of your 2009 refund, which is due from the tax return that you will be file in 2010. If you file for bankruptcy today, you must provide copies of your tax returns for the years 2008, 2007, 2006, 2005, and you may have to provide a copy of your 2009 tax return when it is filed, to the Trustee. In a Chapter 13 Bankruptcy, you must also provide copies of your tax returns to your Trustee during the term of your Chapter 13 Bankruptcy. You will generally lose tax refunds during the entire term of your Chapter 13, not including any amount that can be protected by the "wild card". ------- * The wildcard exemption is $1,000 per person. It allows you to retain up to $1,000 of assets (cash, accounts, property …) that is not otherwise protected when you file for bankruptcy.
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.