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Will your tax refund be taken to pay back your debt if you file for bankruptcy in New York city?
Wiki User
∙ 16y ago
Though no one "wants" to file bankruptcy, your question is valid. An income tax return is usually looked at as a lump sum of money to help get back on one's feet. A down payment for a better car, a vacation for a family, etc. If you file a chapter 7, then no, you will not have your tax refund kept from you, UNLESS you owe back-taxes. Depending on how many years you may have owed taxes, you can also file bankruptcy on those. If you have to file a chapter 13, bankruptcy, then I am not sure. Ask your attorney, and a consultation with a bankruptcy attorney is usually free. It is a good idea to check with your lawyer on this question because it may depend on what state you life in when you filed. I live in Pennsylvania and did indeed receive my refund. My sister, however, lived in New Orleans when she filed her taxes and moved back to Pennsylvania shortly thereafter. Within two weeks of receiving her refund, she received a letter from her tax office telling her she had to return the check to be applied to her bankruptcy creditors. She was even given a date that the check had to be returned by. A lot of times the Trustee will order you to pay the refund to the courts to be distributed to creditors. I've seen this happen in Chapter 7 cases before.
This Q has been pushed around a lot here...and this is what I've pieced together: It depends...a bit on which circuit court your in and how they feel...and especially how much is involved...(obviously large amounts are wanted for creditors...and it just seems unfair for you to not pay someone your debt, because you didn't have the money, because you had too much withheld or prepaid...when the amount withheld/prepaid is entirely controllable by you! The withheld tax account at the IRS is really nothing more than a savings account to pay for the tax actually determined to be due). The other aspect is when you file for BK compared to when you made your money...If the overpaid tax is for a pre-petition filing period...most trustees want it...but if it really isn't - then you can argue it's post petition and yours. So say it's a refund for the past year and you filed BK in December.....well it was basically all withheld as part of the Jan-Dec period in your tax return...and its part of the BK...but if you filed BK in say March...well not much of it is really from the covered BK period - and much of the overpayment should be given to you. (Of course, things like not making $ or deductions evenly through the year can complicate the calculation).
Sort of makes sense.
Wiki User
∙ 16y ago
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If you filed bankruptcy in Dec of 2004 can you get your refund that has already been taken for 2002?
No, the IRS will get to keep it. And, even if you could get it back, the bankruptcy trustee would probably take it to distribute to your creditors.
Is there a way to keep your refund if a payment plan is in effect Went through bankruptcy and making agreed monthly payments Can they still take my refund Can I request it back?
The State can and will take your refund as long as there is a balance owed.
Can they hold your federal return in chapter 7 bankruptcy?
The trustee can ask you to turn it over to him if he knows that you are getting a refund back.
Can you receive a tax refund this year if you filed bankruptcy last year?
You need to discuss this with your attorney. Once you receive your tax refund, it's part of your personal assets that could be seized to pay creditors. If you file bankruptcy before you get your taxes then the government will keep your tax refund and put it towards your debt. The bankruptcy court has 1 year to go back and open your case even after your bankruptcy has been discharged. If you can prove that the money is needed/used for catching up rent or other nessacery bills they will not take it.
What if The bank rejects your tax refund?
It will be sent back to the IRS and a check will be mailed to the address on the return. This should add about 2 weeks to the time taken to receive your refund.
Does a tax refund automatically get sent by the IRS to bankruptcy court after a chapter 7 discharge?
No. Everything that happens in a bankruptcy case goes through the (7 or 13) trustee and if the trustee has not acted to get the refund, but has told you it must be sent to him/her, that is your obligation when you receive it. If the trustee did not know about the refund, and you omitted that information from your schedules, you may find your bankruptcy dismissed with prejudice, so you will not be able to re-file it for a while. If you owe the IRS back taxes, they may intercept it. Then it will depend on whether the taxes were or will be discharged. Talk to a lawyer.
If you expect an income tax refund of 4000 should you file bankruptcy first or your income tax first if you need to purchase a new car?
Why not wait for the refund and buy a car for that amount. See if you have any other options because bankruptcy stays on your financial record for life now. And you do have to pay it back, they no longer they dismiss the debt.
How do you know if the father's tax refund was taken to pay for back child support?
Because they sent me a letter and said so
Will your tax refund be taken to pay back your debt if you file for bankruptcy?
Tax Refunds and ReturnsThere is no specific protection for tax refunds in bankruptcy. As such, the "wild card" exemption* is used to try to protect these funds as much as possible. Further, any portion of your tax refund that pertains to the "earned income credit" is also fully protect and yours to keep.In a Chapter 7 Bankruptcy, you may lose all or part of your tax refund due for the tax year in which you filed your bankruptcy. For example, if you file for bankruptcy in 2009, your Trustee may be entitled to all or part of your 2009 refund, which is due from the tax return that you will be file in 2010.If you file for bankruptcy today, you must provide copies of your tax returns for the years 2008, 2007, 2006, 2005, and you may have to provide a copy of your 2009 tax return when it is filed, to the Trustee. In a Chapter 13 Bankruptcy, you must also provide copies of your tax returns to your Trustee during the term of your Chapter 13 Bankruptcy. You will generally lose tax refunds during the entire term of your Chapter 13, not including any amount that can be protected by the "wild card".-------* The wildcard exemption is $1,000 per person. It allows you to retain up to $1,000 of assets (cash, accounts, property …) that is not otherwise protected when you file for bankruptcy.
Can state withhold federal tax refund for back child support?
Yes. My husband and I filed our federal refund jointly (mind you he was behind 3K on child support) and they took it all of what he owed. BUT, I went back and filed out an 'Injured Spouse Form' to get back what i earned.
What is refund?
If you buy something and you need to send it back for some reason they will give you your money back. This is a refund.
What does dr cardholder mean on your bank statement?
it means the bank has taken money out of your account because; - they possibly covered a refund until the company you received the refund from has paid it back - a company has charged you twice for the one transaction if you notified the bank they have covered the refund until the company pays it back into your account. best thing to do is contact you bank in the frauds and refunds department
