What would you like to do?
This question gets asked somewhat frequently. The general consensus is that it's sort of regional and case specific. A particularly large refund interests them for sure. However, any that they do consider as a bankruptcy asset would have had to be paid over (withheld) in the pre filing periods. If your case has been closed for a while, and you filed yet sometime before that, this years refund would have been from post filing earnings and not subject to them.
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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.
Can the bankruptcy court take your tax refund for 2004 if bankruptcy was filed in Dec 2004 if this was not discussed at the Creditors Meeting?
I think it depends on when your debts are discharged. If they were already discharged, it was a Chapter 7 bankruptcy, and it wasn't discussed at the creditors meeting, then t…he refund is yours. Besides, imagine if you filed on April 15th. You might not get your refund until later June or almost July, and that's months from when your debts were discharged. I'm pretty sure it's yours.
Once a chapter 7 bankruptcy case is closed can the trustee order the debtor to relinquish their tax refund if not ordered prior to closing?
I would think that to be highly unlikely. Once a case is closed, the Trustee has filed all the proper paperwork and the case is set aside, usually permanently. Unless th…ere is substancial fraud involved on your part and the Trustee gets wind of it, I'd think you are safe.
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.
When the court takes the tax refund in a chapter 7 bankruptcy and the funds are not used what happens to the money?
Answer . You mean they didn't need them to pay your debts? You had more than enough assets to do so? Once the debts are paid, the court would not need to keep/seize/use… any additional asset and would return it. But no one should have gotten paid less than 100% of what they were owed with you getting to keep the otherwise usable asset.
Your chapter 7 bankruptcy was discharged in your favor and you are awaiting closing What will happen to your tax refund for this year if nothing was stated on your discharge about courts keeping it?
depends on the amount over $1000.00 money gone !!!!!!!
This question comes up a lot. It seems the answer really is it depends: mainly on how much and very importantly, if your earnings/overpayment of withholding relates more to …Pre petition or post petition time. (In other words, if you filed BK in say December and the refund you get a few months later is for that Jan - Nov pre -petition period...it would be something for you creditors. Opposite if your filing was say in February...especially if you didn't work/earn much in the Jan/Feb period.) In any case, it is absolutely reportable. Tthe portion to be taken by the trustee should be 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. And finally, please understand all BK is a Federal court action...your state has little to do with it....that may just be the name of the Federal Court District, of which there can be many, in your area. Yes, some of these districts have certain rules they hold by, to facilitate the cases they hear (like in AZ, which is a community property state - they would try to use those rules for definitions), but the actual process, etc. is entirely Federal Law and unchanging.
If you live in a community property state and only your husband files for bankruptcy and you file your taxes separately can the bankruptcy court take your portion of your tax refund?
Yes, unless you also file papers for an "Injured Spouse" which may or may not relieve you also of the tax burden.
Until discharge. (The length of the ch 13 plan.) Speak with an attorney about your specific situation. If you can not find an attorney, contact your local Bar associat…ion and they will refer you to one.
Presuming not a community property state and only one of you filed BK? The part that can be shown relevant to the non-BK spouses earnings and overpayment would be exem…pt from claim. (If that person didn't contribute to the overpaid withholding, they probably wouldn't be deemed entitled to a refund).
If your business is a separate corporation or entity, no.
No! You must claim more dependants on your paycheck to avoid the trustee claiming your refund. 1500$ is the limit from Fed and State combined. Keep your refund below that amou…nt combined and you will be in the clear. I find it ironic that if you owe the irs any money the trustee does not help out with that but if your refund is good then the trustee will claim it. Hope this helps!
Yes unless it is Earned Income Credit.
The court can of course....you have placed all your financial affairs in their hands. And cosider, if the refund is for over withholding from work you did in 2008, and yo…u didn't file BK until 2009...that is prepetition money and rightfully should be used to pay your Pre P creditors.
Usually not. Your bankruptcy petition will ask you for information on whether or not you received a tax refund for the year prior, but they don't usually track you afterwards …to find out if you got a refund after your discharge. You are applying for a clean financial slate, and taking away your refund would negate that purpose. If in doubt, check with your bankruptcy attorney for more clarification.
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.