QUESTION
Is it possible for a trustee to take my 2012 refund?
Asked on Sep 12th, 2012 on Bankruptcy - Florida
More details to this question:
If so, how can I avoid this and keep my money now? I really need that refund to get a car and move. What is my best course of action?
15 ANSWERS
I don't have enough information to really answer this question. If you have already filed, you should have exempted your projected income tax refund (that portion already earned at time of filing). If you did not (or if you could not exempt it) the trustee has every right to ask for it.
Answered on Sep 21st, 2012 at 3:47 PM
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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Typically, a tax refund is protected by filing a homestead deed.
Answered on Sep 20th, 2012 at 10:17 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Don't file bankruptcy until you receive your refund and it is spent on exempt property. Please understand that filing for bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.
Answered on Sep 17th, 2012 at 7:00 PM
Criminal Law Attorney serving Fremont, CA
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Steven J. Alpers, A Professional Corporation
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I don't know where you are in the case or what chapter you filed so I cannot give any answer.
Answered on Sep 17th, 2012 at 6:59 PM
Richard S. Goodman
Call your lawyer. If the refund in a Ch 7 was properly listed as exempt, then you should be able to keep it.
Answered on Sep 17th, 2012 at 6:58 PM
Probate and Estate Planning Attorney serving Harrison, MI
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David T. McAndrew, Attorney at Law
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He/She could take the refund, for the benefit of the creditors, if you have exhausted all of your exemptions. If you have not, and your case is still open, you might be able to amend your petition.
Answered on Sep 17th, 2012 at 6:58 PM
It is definitely possible for a bankruptcy trustee to take your 2012 income tax refund. This is normal in every Chapter 13 case, and can happen in Chapter 7 cases too unless you claim and are entitled to an exemption that protects your tax refund. The fact that you really need the money does not matter to the bankruptcy court. The only thing that will protect you is claiming and being entitled to an exemption that protects your tax refund. You should discuss this matter with your bankruptcy attorney. If you do not have a bankruptcy attorney, you should consult with a good one immediately.
Answered on Sep 17th, 2012 at 6:58 PM
Bankruptcy Attorney serving Bellevue, WA
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Wild Sky Law Group, PLLC
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Yes, the trustee may take a tax refund; however, if you use one of your exemptions to cover it, you may be able to preserve it for yourself.
Answered on Sep 17th, 2012 at 6:57 PM
Yes. If you need to keep it, dont file bankruptcy.
Answered on Sep 17th, 2012 at 6:57 PM
Real Estate Attorney serving New Port Richey, FL
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Jay W. Moreland, P.A.
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Yes, the trustee can take the refund if it is not otherwise exempt. There are two ways to keep the refund. One is to change your withholding so that you do not get a refund. You will get the money in your paycheck throughout the year, but will not get a lump sum when you file your taxes. If you save that money before you file bankruptcy, the bankruptcy court will still take it. So you must get it and spend it to keep it. The other alternative is to hold off fling the bankruptcy until after you have received and spent the refund which is what I usually advise.
Answered on Sep 17th, 2012 at 6:56 PM
William P. Turner
Yes, your trustee is generally entitled to the portion of your 2012 state and federal refunds equal to the percentage of the year that has passed as of the day you file bankruptcy. One exception is that you can protect the earned income credit portion of your refund. You could wait until next Spring to receive and spend your refund prior to filing.
Answered on Sep 17th, 2012 at 6:56 PM
Bankruptcy Chapter 7 Attorney serving Fort Collins, CO
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The Salas Law Firm LLC
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Yes, the trustee can and will take your 2012 refund. There are ways to protect your refund, so contact an attorney for legal advice.
Answered on Sep 17th, 2012 at 6:55 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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When you filed your Petition, you should have listed that as an asset and then claimed that it was exempt. I am presuming this is a Chapter 7. If you did not do that, you would need to file an Amendment to Schedule B and C, and if you can still exempt it, then you would be ok. It depends on your jurisdiction as to the Exemption Amounts. Seek out a qualified bankruptcy counsel to assist you.
Answered on Sep 17th, 2012 at 6:55 PM
Norman Linder Hull
The Trustee is entitled to take the proportion of your refund that corresponds to the proportion of the calendar year before you filed your petition; for example, if you filed on June 30, the Trustee would claim 1/2 of the refund; HOWEVER, if the amount the Trustee could claim fits within your exemptions, you could keep your refund. SEE A QUALIFIED BANKRUPTCY ATTORNEY.
Answered on Sep 17th, 2012 at 6:54 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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That refund is part of your bankruptcy estate, and part of it is not yours. If the trustee demands it you must give it. Recognizing that you would not receive it for many months and that the refund will be comprised of both pre-petition and post-petition contributions, there is a real issue as to how much the trustee would be entitled to. Talk with the trustee about it, or better yet the attorney who filed the bkr for you.
Answered on Sep 17th, 2012 at 6:53 PM