QUESTION
Will my 2013 taxes be affected or taken if I file bankruptcy right now?
Asked on Aug 06th, 2013 on Bankruptcy - Missouri
More details to this question:
I am falling behind on my bills and am interested in filing but am skeptical because I need my tax funds when I file in 2014 and need to know if taxes are held when a bankruptcy is filed.
7 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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You need to talk with an attorney it depends on which chapter you file & other factors.
Answered on Aug 13th, 2013 at 6:49 PM
In most states, tax refunds must be turned over to the bankruptcy trustee to be used to pay your debts unless state law provides some way to exempt them. In Nevada, the Earned Income Credit portion, if any, of the refund is exempt. There is also a wildcard exemption of $1,000 that can be applied to the upcoming refund to protect it from being taken by the Trustee. A small price to pay if the bankruptcy is worth filing, IMHO.
Answered on Aug 13th, 2013 at 12:19 AM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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This is a state specific question. In Idaho, no exemption will cover your tax refund (except the Earned Income Tax Portion) so you will generally lose your tax refund if the Trustee wants them. You will need to either wait to file your bankruptcy until after you receive your refunds, or take your chances with the Trustee administering them.
Answered on Aug 13th, 2013 at 12:19 AM
Chapter 7 and Chapter 13 Bankruptcies Attorney serving Dublin, OH
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Granger Law Firm LLC
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Certain portions of your tax refund cannot be taken by the court- the Earned Income Credit and the Additional Child Tax Credit. Also, the court can only take the amount of refund earned up to the date of filing- so if you filed now, then the court could only seize the portion of the refund that is attributable to the 7 months you have worked so far. Finally, you are allotted a "wildcard" exemption which lets you keep $1100 of money, where ever it is, and this can be applied to your 2013 tax refund proceeds. Given all of the above factors, I would think it unlikely that you would lose your tax refund- but an attorney can review and tell you for sure.
Answered on Aug 13th, 2013 at 12:19 AM
William A. Siebert
If you file Chapter 13, your taxes go to help pay the plan. Chapter 7 straight bankruptcy does not affect your tax liability.
Answered on Aug 13th, 2013 at 12:19 AM
If you are able to exempt your tax refund in bankruptcy, you will be able to keep it. The govt will not "hold" your refund because of bankruptcy but, if you cannot exempt it, the trustee may take it to use to pay down your debt. You should know before you file if this is a possibility or not. It depends on how much other "stuff" you own and how much of it you want to keep (or protect). Without more information, I cannot comment further. You should consult with a bankruptcy attorney to make that determination.
Answered on Aug 13th, 2013 at 12:19 AM
Bankruptcy Attorney serving Florissant, MO
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Law Offices of Thomas Corcoran Phipps
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The trustee will try to take the refund to pay creditors. You should get the refund first, pay bills, then file bankruptcy.
Answered on Aug 13th, 2013 at 12:18 AM