Will bankruptcy keep companies from taking my tax returns? 6 Answers as of October 07, 2010

Is it true that companies may be able to come after my tax returns to pay off my debt? Is this a situation that bankruptcy can prevent?

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The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
I assume you mean tax refunds. A tax return is a document filed with a state or federal taxing agency. Refunds earned prior to filing your bankruptcy case are property of your bankruptcy estate
and, unless you have exemptions available to protect them under applicable law, the trustee in your bankruptcy can take them. I am not sure what companies you are referring to, but no creditor can take collection actions against you after you file a bankruptcy. That would violate the "automatic stay".
Answer Applies to: California
Replied: 10/7/2010
Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
I assume that you mean tax refunds, not tax returns. Bankruptcy stays any attempt to collect from the debtor, including an attempt by a private company to take your tax refund from you.
Answer Applies to: California
Replied: 10/6/2010
Builders Law Group
Builders Law Group | Nick Campbell
It depends. Remember, when you file, technically your assets, in whole or part, and depending on which chapter you file become property of the bankruptcy estate and the Trustee is responsible for determining what do with the income and debts. If you received a tax refund within six months of filing, the amount will be included for purposes of income calculation and may affect your eligibility for a Chapter 7 or your income to satisfy creditors in a Chapter 13. If you are filing a Chapter 13 bankruptcy and your plan proposes paying less than 100 percent to your creditors, there is a chance the Chapter 13 trustee will seize it to satisfy some of those debts. You should discuss with your bankruptcy attorney the timing of your filing.
Answer Applies to: California
Replied: 10/6/2010
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
Yes. Bankruptcy will protect your tax return from creditors.
Answer Applies to: California
Replied: 10/6/2010
Sussman & Associates
Sussman & Associates | Mitchell Sussman
Whether or not this can and will happens depends upon very specific circumstances. For example, how large is your refund? Is there a judgment against you? Consultation with a BK attorney near you is called for.
Answer Applies to: California
Replied: 10/6/2010
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