Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
All or a portion of your tax refunds can be considered part of your assets which the bankruptcy trustee can convert into cash to pay your creditors. You should consult with your bankruptcy attorney regarding any exemptions.
Answer Applies to: Massachusetts
Rhonda R. Werner Schultz, PL | Rhonda R. Werner Schultz
Any tax refund you receive is an asset of the bankruptcy estate. You will need to see if this qualifies for any of the exemptions in order to keep it. If it does not qualify, the bankruptcy trustee can take the refund and pay your creditors. Timing is everything on a filing where you expect a refund as you can use the refund for necessary living expenses, or a bankruptcy attorney's legal fees in order to avoid losing the refund in the bankruptcy. If you owe taxes for the current year, they will be given priority and will not be discharged in the bankruptcy. Certain taxes can be discharged, but a very careful look at the taxes must be done to see if they qualify for discharge in your chapter 7 bankruptcy.
Answer Applies to: Wisconsin
Lake Forest Bankruptcy | Anerio V. Altman, Esq.
Ultimately it is fine, but you will need to see an accountant. It is not a difficult issue because any debt discharged in Bankruptcy doesn't create a taxable gain for you. There is a form, 982, that the accountant should fill out and supply with your return.
Answer Applies to: California
Ashman Law Office | Glen Edward Ashman
This is why you get a good lawyer. Depending on your finances and potential tax liability or refunds you may want to deliberately file before or after a tax deadline. The wrong choice can be costly - and you could lose a refund, or lose the ability to discharge certain tax liabilities.
Answer Applies to: Georgia
Goldsmith & Guymon | Marjorie Guymon
A tax refund is not an exempt asset, so if you are anticipating a refund check it may be intercepted by the bankruptcy trustee assigned your case. Filing bankruptcy is not a taxable event, so there would be no tax liability created in filing.
Answer Applies to: Nevada
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
For one, filing bankruptcy does not create the taxable "forgiveness of debt" that other debt settlement agreements create. In many jurisdictions, including Indianapolis Bankruptcy, your tax refund(s), if any, may be in part, or in whole, part of the bankruptcy estate. Each individual's situation is unique.
Answer Applies to: Indiana
R. Steven Chambers PLLC | R. Steven Chambers PLLC
If you are entitled to a refund for the year in which you file, that refund is pro-rated between you and the trustee based on your filing date. For example, if you file on September 30, that is of the year that has passed before you filed, so the trustee is entitled to of your refund and you are entitled to the rest.
Answer Applies to: Utah