QUESTION
Will bankruptcy affect my 2014 taxes if I filed in 2013 but was finalized in 2014?
Asked on Feb 04th, 2015 on Bankruptcy - Kansas
More details to this question:
I filed for chapter 7 bankruptcy in October 2013 and was finalized in January 2014. Will my 2014 tax return be taken? I was unemployed in 2013 so I did not get anything back last year as I was not able to get a job until March 2014.
9 ANSWERS
The Chapter 7 Trustee can take a portion of your 2013 tax refund. For example, if you filed-on October 1st, nine of the twelve months had gone by, or 9/12 = 75%. The Trustee could take 75% of your income tax refund. Normally the Trustee doesn't declare your case an "asset case" unless he or she can get at least $1,000 or more from you. Also, certain parts of your tax refund might be exempt. Like Earned Income Credit or Child Tax Credit. Hope this helps. Good luck!
Answered on Feb 10th, 2015 at 6:10 AM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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This question is worded strangely as tax returns are not taken. Perhaps what you are asking is whether if you are entitled to a tax refund in 2014, the refund will be taken by the Trustee. You said the bankruptcy was "finalized". I assume this to mean that the debt was discharged and the case closed. If that is what happened the refund is yours to keep.
Answered on Feb 05th, 2015 at 7:33 PM
If you filed Chapter 7, the bankruptcy trustee was only interested in your 2013 tax return & refund. Nothing else. If you filed chapter 13, your trustee gets both your return & refund as long as your case remains open, unless your Plan says otherwise.
Answered on Feb 05th, 2015 at 3:13 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Any income you earned after you filed your bankruptcy in October can't be taken by the trustee. If you used an attorney, he/she should have estimated your 2014 refund in October and instructed you to reduce your withholding to give you a minimum refund. If you didn't do that, then they can allocate your withholding over the year and take the part of the refund attributed to the withholding before you filed.
Answered on Feb 05th, 2015 at 4:33 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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I would think not but check with your lawyer, or get one.
Answered on Feb 05th, 2015 at 4:32 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Generally the discharge of debts in a chapter 7 bankruptcy has no tax consequences. Consult your bankruptcy lawyer for more detailed information relating to your specific circumstances. Good luck.
Answered on Feb 05th, 2015 at 4:32 AM
2 Awards
Your 2014 tax refund is not part of the bankruptcy estate. Your 2013 tax refund is. However if your case has been closed that means the trustee abandoned the refund to you to keep.
Answered on Feb 05th, 2015 at 4:31 AM
No, your tax refund is not at risk. Chapter 7 looks at whatever assets you had, including tax refunds owed to you, as of the date of filing. If you filed bankruptcy in October 2013 and only started working in March 2014, any tax refund you get this year will be a result of earnings you had after the bankruptcy filing date, and therefore, it is beyond the reach of the bankruptcy trustee. Of course, if you specifically promised to turn over that refund in order to pay for some liability identified in your Chapter 7 bankruptcy, then you would be held accountable for that. But otherwise your tax refund is safe.
Answered on Feb 05th, 2015 at 4:31 AM
Bankruptcy Attorney serving Overland Park, KS
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Wellman Law LLC
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They cannot take your tax return, but can they take your tax refund? Bankruptcy joke. If you filed your case in 2013 I don't see how your 2014 refund could possibly be property of a Chapter 7 bankruptcy estate, but you can always ask the Trustee questions like this if you're concerned.
Answered on Feb 05th, 2015 at 4:30 AM