QUESTION

What is the percentage a trustee can take from your federal income tax check?

Asked on May 23rd, 2017 on Bankruptcy - Michigan
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4 ANSWERS

Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
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What a bankruptcy trustee can take from your tax refund depends more on exemptions available to you than by any set percentage. If you filed bankruptcy on the first day of the year, the trustee may take 100% of last years tax refund and 1% of the refund check for the following year. If you file bankruptcy on day 183 of the year, the trustee can take half of your refund check, assuming you have no other exemptions available.
Answered on Aug 09th, 2017 at 4:27 PM

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I assume you mean how much can the trustee take from your refund. The answer will depend on what you exempted at the beginning of the case, and the practice in your district. In some districts the trustee will want it all; in others 50%; in yet others, it is up for negotiation. Consult your lawyer. If you don't have one, retaining one is almost always a good investment.
Answered on Aug 09th, 2017 at 4:25 PM

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Once you file your bankruptcy petition the trustee controls your state there is no percentage of anything. The trustee could take the entire federal income text check depending upon whether this is pre-or post petition the chapter you file and the date upon which you received your tax return. Your question is not specific enough for a better answer.
Answered on Aug 09th, 2017 at 4:24 PM

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Bankruptcy Attorney serving Grand Rapids, MI at David Andersen & Associates, PC
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There aren't enough details to answer this. If you're in Chapter 13, the whole amount may need to be turned over to the trustee unless your plan says otherwise or a request to retain the funds has been completed. If you're in a Chapter 7 bankruptcy, this answer is determined by how much exemption you have.
Answered on Aug 09th, 2017 at 4:23 PM

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