QUESTION
Will husband's bankruptcy affect tax refund even though we were separated?
Asked on Feb 19th, 2013 on Bankruptcy - Kansas
More details to this question:
My husband's bankruptcy was discharged in aug 2012. When he filed we were separated. Does his filing affect our tax refund?
8 ANSWERS
The only way the tax refund will be effected is if the financial company gives your husband a capital gains statement for the amount that was placed in the bankruptcy.Other than than this exception, there really shouldn't be anything that will hinder your tax refund. You can also consult with your tax prepare to file your tax return as injured spouse.
Answered on Feb 21st, 2013 at 3:08 PM
Richard hirsh
This is a very hot topic in bankruptcy law. Some courts hold that the tax refund is just split 50/50 between the trustee and the non-debtor spouse; however, the trustee's typically adhere to the rule that the refund should be split on the basis of the actual income of the two spouses, so if most of the tax refund is attributable to your husband's income, the trustee would claim that portion of the refund.
Answered on Feb 20th, 2013 at 11:05 PM
If it has been 6 months since his filing date, I think you are ok. Did the trustee tell him he expected to receive part (or all) of the refund. This was a 7 right. Has the case been closed?
Answered on Feb 20th, 2013 at 9:46 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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If it was discharged and CLOSED, then no. But if not closed I need to know more before I can advise you.
Answered on Feb 19th, 2013 at 3:49 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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If you filed joint tax return it can only affect half if at all. It depends on how much personal exemption he has left and if he already got discharge before tax filing.
Answered on Feb 19th, 2013 at 3:49 PM
If your husband filed bankruptcy in 2012, he might have to turn over a portion of his tax refund to the bankruptcy trustee. He should contact his trustee to ask this question. Every trustee is entitled to take a different position on this issue and there is no one size fits all answer I can give you.
Answered on Feb 19th, 2013 at 3:48 PM
Bankruptcy Attorney serving Overland Park, KS
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Wellman Law LLC
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If the discharge occurred in May the filing was probably May or prior. In Kansas, that would mean that less than half of the refund would be property of the Bankruptcy estate (because the case was filed less than half way through the year), so if that was the only potential asset, most likely the Trustee is not holding the case open for that. Really the easiest way to verify that the refund has been abandoned by the Trustee is to find out if there was a Report of No Distribution filed because that would mean all assets including the refund have been abandoned. Otherwise you really have to either speak to the Trustee or have an attorney look at the schedules, docket history and tax return to really know.
Answered on Feb 19th, 2013 at 3:47 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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It could.
Answered on Feb 19th, 2013 at 3:47 PM