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. Marcy * 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.
Depends on if your due a refund to start...and if it was taken from earnings before your filing or after.
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 tax 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.
Yes, you do. And any tax refund may have to be given to the trustee.
I filed my Federal taxes for 2008 and just received a refund and I am in the process of filing bankruptcy this month will that refund be added as income to the bottom line?
If received for last year yes. the one for next year, received after filing, no.
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 thing. 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.
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.
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.
The trustee may take the refund and distribute it to creditors because a tax refund is not considered an exempted asset under bankruptcy laws.
The trustee may be able to take a portion depending upon the amount of the refund and the time frame between the filing or discharge of the BK and the date of the tax return. If a percentage can be ceased it will be pro-rated according to the number of months between the BK discharge and filing of taxes. In a chapter 13, the refund is not ceased but if it is of a considerable amount it may affect the payment amount assigned to the BK. But the money was generated BEFORE you filed for bankruptcy, so it's technically an asset that you already had and as such is to be factored in to the distribution to the creditors.
By doing all the calculations required, but not actually filing the forms. You really can't estimate your refund without doing the calculations in at least an approximate form.
No. It was not part of your "bankruptcy estate" as of the date of filing and is not one of the items that have to be reported if received within 6 months of filing. Especially if you do file your return until April.
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 included 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.
It makes no difference. The refund of your overpayment is an asset that is part of your BK anyway. It was overpaid using funds before your filing, that would/could have been used to pay debts..it is a pre-ptition asset...simply on deposit at the Gov't. When you file to receive it is irrelevant.
The amount, no Will some part of it likely be used to pay your debts (because if you didn't have too much withheld that is what I'm sure you would have done with it then), yes.
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.
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. There 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.
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 refund 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.
The actual refund will probably be required to be included in the filing. When all assets are totaled and exemptions deducted the amount determined to cover specified exemptions will be returned to the debtor. Which may end up being the same amount as the refund, however regular bankruptcy procedures must be followed.
Either way they will want a tax return filed before filing for chapter 13. If you are expecting a refund then they will seize it if it is after so to keep the money file first and wait for the return, it will be considered as part of your income. If you owe it is better to know the amount before filing.
within 6 weeks of filing
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.
No, if your BK (assuming this is a Ch. 7) is discharged, the money is yours. The only time you would have to surrender the refund is if you were expecting a refund during or shortly thereafter from when you originally filed.
A tax refund is considered income/asset belonging to the BK petitioner and is therefore subject to seizure for the repayment of debt. Whether 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.