Tax refunds after bankruptcy?

[taylorjm]

What is the name of your state? Michigan

I thought I read something in another post about how your tax refunds can be siezed after you file bankruptcy. Is that true? What about if you file your taxes joint with a spouse, and but the spouse didn't file bankruptcy, only one person did, can that money still be siezed?

Thanks.

 

[willingtocope]

Tax refunds do have to be reported as income on your BK papers. There are some time limits involved, but I'm not sure what they are. And, I'm not sure Michigan would let just one spouse file BK.

Talk to a lawyer...you can usually get a free consultation on the first visit.

 

[Ladynred]

To my knowledge, NO state prohibits only one spouse from filing for BK.
Assuming your tax refund this year is spent, it would be of little interest to a Trustee. If you file later this year, then the Trustee can and will take either some percentage or ALL of your refund depending on the amount. If you normally get a hefty refund, a Trustee would be interested in that money and can go after any funds you get for up to 6 months after your bankruptcy.

 

[rainmand]

The first year the Trustee sezied my tax refunds and I had to notify my attorney to contact them so they could be released. My chapter 13 was a 100% payoff plan and I was current on all my payments, so the Trustee released 100% of my refunds to me. My attorney told me they would have kept some or all of the funds if I wasn't on a 100% repayment plan or I was late on my payments. The second year the Trustee provided me with my tax refund without me having to get my attorney involved.

 

[racer72]

Tax refunds do have to be reported as income on your BK papers. There are some time limits involved, but I'm not sure what they are. And, I'm not sure Michigan would let just one spouse file BK.

Talk to a lawyer...you can usually get a free consultation on the first visit.

Wrong. Anticipated tax refunds are an asset, not income. That is money that has already been earned and is already part of one's gross income.

To the OP, now would be the time to adjust your W-2 filing and have less money withheld for federal income tax. You want to balance the amount withheld so your net income is still in the "red" so to speak and you don't have to pay any taxes next year.

 

[credit2crazed]

I hope that the people here who have shared experiences or info have done so with good intentions. Maybe it has been a while since they went through their bankruptcy and so they may not be right on the money with the facts!

I think the most important thing to do is get the information you seek from here and then you will have become armed with most of the concerns you should address with your attorney. As said many times on the forum, "trust your attorney" he should be able to provide you with the most accurate information for your particular situation and state.

If you're like me, there are always more questions because bankruptcy is a great, big ball of confusion that I wish we could have avoided. In fact, I will have additional questions for our attorney just for reassurance. All I know is he told us that if we had filed, received and spent - no problem and because of the time we are filing there should be no worry for future refunds -but I will ask again trust ME!

You know "Bad things do happen to Good People!"