Chandler Bankruptcy Tips - Can I Keep My Tax Refund and Still File Bankruptcy?
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Posted On :
Feb-28-2011
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Article Word Count :
679
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A lot of people don’t know this. But the bankruptcy court and the U.S. trustee who acts as a referee in your bankruptcy is actually paid by tax refunds. And where do they get those tax refunds? They get them from people who file.
So if you anticipate getting a tax refund, you may want to wait and obtain your tax refund and spend it on things you need. Maybe you need to make a car payment. So go ahead and make that car payment.
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A lot of people don’t know this. But the bankruptcy court and the U.S. trustee who acts as a referee in your bankruptcy is actually paid by tax refunds. And where do they get those tax refunds? They get them from people who file.
So if you anticipate getting a tax refund, you may want to wait and obtain your tax refund and spend it on things you need. Maybe you need to make a car payment. So go ahead and make that car payment.
Maybe your tax refund is more than just a single car payment. You can actually make up to four months of car payments if you intend to keep your car in bankruptcy.
Also, you can pay things like your utilities. You might want to pay them forward. You could take the funds and put it into your house if you intend to keep your house in the bankruptcy.
Those are some of the things you can do with your tax refund.
What you can’t do is you couldn’t, say, take the tax refund and take a vacation then then file bankruptcy. The court would not be happy with that. In fact, they’d actually ask you to pay the money back because they wouldn’t see that as a necessity.
And the other thing that you can do with your tax refund is say, for example, it’s pretty big and you have some time, you might want to put that in an IRA because retirement funds are protected in bankruptcy. So you could put your tax refund in an IRA, build yourself up a little nest egg, wait four months, and then file bankruptcy.
So, I always suggest that, if people can avoid giving their tax refund to the bankruptcy court, they should. And get that money and spend it on things that you know you’re going keep. Do not spend it on debt you know you’re going to get rid of.
So, for example, if you have credit card debts and they’ve been calling, don’t cave in and give them your tax refund. Think of things that will get you further ahead. That’s what January is about is having the financial resolution to get yourself out of debt.
So those are things that you can do with your tax refund.
Now if you’re in a situation where you’re facing a garnishment, which is a terrible place to be, and your creditor is going to be garnishing you but you know you’re going to get a tax refund, sit down and figure out what’s worse. Can you afford to have 25% of your gross paycheck taken from you every pay period until you file or until you get your tax refund and then file bankruptcy? Or should you forego that tax refund and file in order to stop that garnishment?
So some people are in that situation. And that’s really where you have to figure it out.
Other people that need to look at that issue or when you don’t get your W-2 on time or you’re not able to file right away and you need to, like I say, file bankruptcy, once you file, the court looks at what month you filed and they can take a percentage of your tax refund based on the entire year.
So say I file in February, they can take two months of my tax refund because I filed in the second month. Say I filed in June and I haven’t filed and haven’t received my tax refund, when I get my tax refund, they can take 50% of it, half of the year. June is the sixth month.
So that’s why the tax refund is so important. It’s something that you could hold onto if you plan properly.
And a really good way to plan properly is always ask the bankruptcy attorney these kinds of questions. And they can answer for you and plan so you can get out of debt.
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Article Source :
http://www.articleseen.com/Article_Chandler Bankruptcy Tips - Can I Keep My Tax Refund and Still File Bankruptcy?_54237.aspx
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Author Resource :
To get additional information on debt settlement and bankruptcy options please visit our web site. We would also like to offer you a free online debt evaluation. You can claim your free online debt evaluation at http://arizonalegaladvocacy.com.
Christy Thompson, your Chandler Bankruptcy Lawyer.
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Keywords :
chandler bankruptcy lawyer, chandler bankruptcy attorney, mesa bankruptcy lawyer, mesa bankruptcy attorney, gilbert bankruptc,
Category :
Finance
:
Debt Consolidation
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