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Will your tax refund be taken to pay back your debt if you file for bankruptcy in New York city?
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.
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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.
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.
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.
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If bankruptcy is filed and federal back taxes are owed do you still have to pay them?
Yes, as a general rule. Taxes of all kinds are not discharged by the bankruptcy process. That means, when it's all over with bankruptcy, you still owe taxes to the f…ederal gorvernment, and any other government. In short, fiiling a petition in bankruptcy and a subsequent discharge will not get you out of paying taxes to the government. It's really easy to filing a petition in bankruptcy; it's very expensive not to do it right; the Bankruptcy Court is just not the same as your Magistrate's court, or the small-claim's court. It's very expensive to do it wrong and you cant do it but every so often (time limits: you just have to see the code. If you have a bankruptcy sitution you really need to see a lawyer who works with bankruptcy.
Can you find out if your tax refund will be taken for a past debt i.e student loans before you file?
Answer Typically a notice via mail is issued prior to the filing period alerting the student loan or child support debtor that their refund may be taken in whole or part… to repay these obligations. 1-800-304-3107 is the best way to find out...it's automated.
Do you keep a tax refund after bankruptcy?
Has the chapter 13 bankruptcy been discharged (completed)? If not then in your bankruptcy agreement for repayment it probably states that you must surrender any tax return to …the repayment schedule. Read your entire agreement and consult with your attorney to be sure.
Can you receive a tax refund this year if you filed bankruptcy last year?
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.
Under bankruptcy do you have to pay back your debt?
There are several different types, or chapters, of BK. Probably the main aspect of each is that the court protects you from collection actions of your creditors while …a process to resolve your financial problems is decided. The court normally appoints a trustee to oversee your affairs, and you are restricted from entering or changing financial agreements without their agreeing. Some require a payment plan be established where for some period of years, you pay a percent of your earnings to the trustee for him to use to pay your creditors. You may also have to attend financial counseling sessions and such. If, after complying with the terms of the arrangement there is still debt unpaid, the court may dismiss it. Of course, certain types of debts are not able to be discharged (like child support), and ones that have a secured interest, like a mortgage on a house, have the ability to have the asset sold to pay the debt too. The important thing is the BK involves all your debts and all your assets...your assets are used to pay the debts...you are not just relieved of the debt...and again, secured debts get first call on the receipts from those specific assets. The purpose of BK is to eventally give you a "fresh start" without debts....that isn't to say a head start...no debts but the assets they provided.
Taylor Stinson
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Do you pay taxes on debt discharged in bankruptcy?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Qualified principal residence indebtedness: This is …the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income. Non-recourse loans: A non-recourse loan is a loan for which the lender's only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
Does the government have to pay your debt if you file bankruptcy?
Not only does it not have to pay, it will not pay your debts. Debts are not extinguished in bankruptcy. The creditors are prohibited from collecting them, assuming you get a d…ischarge. They still exist in some world of uncollectability.
If a tax debt is owed to the IRS can filing bankruptcy settle this debt even with a lien?
Also keep in mind that liens are not released until the liability is paid in full regardless of the amount was dissolved by the bankruptcy. If you file Offer In Compromis…e, then any equity you have in property will be your offer amount. Liens: Once these requirements are met, a lien is created for the amount of your tax debt. By filing notice of this lien, your creditors are publicly notified that we have a claim against all your property, including property you acquire after the lien is filed. This notice is used by courts to establish priority in certain situations, such as bankruptcy proceedings or sales of real estate. The lien attaches to all your property (such as your house or car) and to all your rights to property (such as your accounts receivable, if you are a business). Caution! Once a lien is filed, your credit rating may be harmed. You may not be able to get a loan to buy a house or a car, get a new credit card, or sign a lease. Therefore it is important that you work to resolve your tax liability as quickly as possible, before lien filing becomes necessary. Yes. But you are much better off to look at other options, including something oficially caled "an offer in compromise". Bankruptcy involves everything you owe and everything you own...not just tax. ANS The above are, well simply wrong: Once a BK is filed, by law, no offers in compromise can be considered. The IRS will not communicate with you about the debt or an offer in compromise any longer.....IT IS AGAINST THE LAW FOR THEM TO DO SO.....it is considered trying to collect a debt, all actions for which MUST be stopped upon a BK filing. The tax due becomes part of the BK and the IRS or other auhtorities, will file claims with the court and these debts will be handled as part of the BK, and are given a priority over many others.
Can you file bankruptcy on back taxes?
Answer NO
Can you get a sales tax refund in New York if you are a visitor?
No, sales taxes in the US are really not like the VAT tax that your probably relating to otherplaces. They are due on the entire sales price, at the location of the sale….
If you filed chapter 13 bankruptcy will the trustee take your tax refund?
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 do not owe the IRS will your refund been taken if you file bankruptcy?
It depends on the courts. I had a friend who went through bankruptcy and was owed a refund from the IRS. The trustee for the bankruptcy ordered her to turn over the refu…nd to the courts to be paid out to creditors. So it could happen, but they cannot actually intercept or offset your refund. They will just order you to pay it to the trustee.
Answered
Can a creditor take your income tax refund if you file Chapter 7 Bankruptcy?
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.
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Can you get a refund after you file bankruptcy?
Very likely not - epending on when nyou filed and when the money was withheld...the refund is because you had more money than needed withheld from your paycheck and pu i…n (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?
Answered
What type of bankruptcy can you file to not have to pay off your debt?
In ANY bankruptcy, whether or how much of your debt gets paid is dependent on what type it is, and more importantly, what your assets are. Your assets are used to pay yo…ur debts...have enough and 100% gets paid.
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If you file bankruptcy chapter 13 and tax refund same month will you still get it?
You may get it, but you will have to turn it over to the trustee. It may shorten your plan payment time period.
Answered
Can overpayment unemployment debt be taken in tax refund?
Yes. Unreturned unemployment benefits overpayments may be deducted from your federal income tax refund.