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Do you have to forfiet your income tax return if you file chapter 13 bankruptcy?
Wiki User
∙ 11y ago
You made an interest-free loan of your money to the IRS and obviously did not need the income that represents. You are not "forfeiting" your refund. It will be added to your plan payments and may permit more of your debts to be paid pro rata - after the trustee gets his/her cut - or shorten the term of the plan if you have a 100% plan.
Wiki User
∙ 11y ago
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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.
If a bank repossesses a car do they have to return it if you file Chapter 7 bankruptcy?
No.
Why can a trustee take your income tax return if you are filing a chapter 7 bankruptcy which relieves you of your debt and does the trustee give the money to the creditors?
The trustee may take the refund and distribute it to creditors because a tax refund is not considered an exempted asset under bankruptcy laws.
In California If Chapter 7 bankruptcy is the last resort Should you file bankruptcy first then return a car that has a big loan on it?
Yes. In that order.
Can they hold your federal return in chapter 7 bankruptcy?
The trustee can ask you to turn it over to him if he knows that you are getting a refund back.
What do you need to know about filing your tax return if you have filed bankruptcy during that year.?
No, you still owe the government. Bankruptcy proceedings begin with the filing of a petition with the bankruptcy court. The filing of the petitions creates a bankruptcy estate, which generally consists of all the assets of the person filing the bankruptcy petition. A separate taxable entity is created if the bankruptcy petition is filed by an individual under chapter 7 or chapter 11 of the Bankruptcy Code. The tax obligations of the person filing a bankruptcy petition (the debtor) vary depending on the bankruptcy chapter under which the petition was filed. Generally, when a debt owed to another is canceled the amount canceled or forgiven is considered income that is taxed to the person owing the debt. If a debt is canceled under a bankruptcy proceeding, the amount canceled is not income. However, the canceled debt reduces the amount of other tax benefits the debtor would otherwise be entitled to. This information is not intended to cover bankruptcy law in general, or to provide detailed discussions of the tax rules for the more complex corporate bankruptcy reorganizations or other highly technical transactions. For additional tax information on bankruptcy, refer to Publication 908, Bankruptcy Tax Guide. See http://www.irs.gov/publications/p908/index.html
Provisions of the 2005 Bankruptcy Act?
In October 2005, President George W. Bush passed the Bankruptcy Abuse and Consumer Protections act that made it more difficult for consumers to have debts discharged through bankruptcy. This affected both Chapter 7 and Chapter 13 bankruptcy, the two types most often filed by individual debtors.Specific Changes in Bankruptcy QualificationChapter 7 bankruptcy eliminates most consumer debts, with the exception of government student loans, overdue taxes, alimony and child support. In order to qualify for Chapter 7, your personal income must fall below the median income in your state of residence. The purpose of this means test is to determine if you have at least $100 a month available to repay creditors. If your income is lower than your state median, you must produce a list of your current debts, monthly expenses and income. Both your income and your debts will be evaluated for the six- month period immediately preceding your bankruptcy filing. You must present your previous year's tax return and paystubs as proof of your income.If you do not pass the means test, you are ineligible to file for Chapter 7 bankruptcy. However, you may still be eligible to file Chapter 13, which is a modified repayment plan for your creditors. Under the laws of Chapter 13, you have up to five years to repay your creditors based on a repayment schedule determined by a bankruptcy trustee. The amounts you are required to pay are determined from an expenses to income formula used by the bankruptcy court.Another change brought about by the bankruptcy reform laws is the requirement for credit counseling prior to your bankruptcy being discharged. Your bankruptcy lawyer will provide you with a list of approved credit counseling agencies where you can complete this requirement. You are also required to obtain post-filing credit counseling and submit a certificate of completion to your bankruptcy lawyer.Changes in the Automatic Stay Process and Child Support CollectionPrior to 2005, filing bankruptcy meant that most people and organizations had to stop collection activity against you. Since that time, the automatic stay no longer applies to eviction notices, divorce proceedings, suspension of your driver's license or payment of child support. If you owe past due child support, the person you owe it to will be given top priority over your other creditors to receive payment in either type of filing.
Will your tax refund be taken to pay back your debt if you file for bankruptcy?
Tax Refunds and ReturnsThere 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 possible. 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.
What is the purpose of a finance in business?
The purpose of finance in business is to avoid bankruptcy, protect your assets, receive income, to plan ahead and submit/receive an accurate tax return.
When filing for the federal income tax return do you have to attach schedule a for the state income tax return?
No, when filing for the federal income tax return, you do not attach the Schedule A for the state income tax return.
Should you claim the highest number of deductions on your tax return if you are in a Chapter 13 bankuruptcy?
No...that is the type of logic that got you in bankruptcy! You should file using the correct number to have the best amount of withholding....you are not tax free now you understand don't you? In fact, you may well have more taxable income than ever before.
If your are waiting for a discharge of a chapter 7 can the court take your Governments stimilus package money that is coming?
Yes, just as they can take money from a tax return during the year you filed for bankruptcy.
