Will I Lose My Tax Refund if I File Bankruptcy?
Protect your tax refund – consult a bankruptcy attorney
Tax season means tax refunds for millions of Americans. If you are expecting a tax refund you can use it to get out of debt by filing a bankruptcy! But you must be careful on how you spend this refund. We can help you create a plan to spend your refund and get out of debt for good. Do not rely on Internet searches, contact an attorney for a free consultation.
When you file bankruptcy, certain property is protected by law – that means the trustee who is appointed in your case cannot take certain property from you to sell for the benefit of the creditors. Which property is protected depends on the exemptions you can claim on your petition. Those exemptions depend on the state where you lived in the two years prior to filing bankruptcy. If you have been a resident of Kansas, you will generally be able to protect only a portion of your tax refund – the earned income credit portion (EIC). This means that you might be better off spending that tax refund before you file a case. If you have not lived in Kansas for the past two years different rules apply but we can go over them with you. Bankruptcy law is complex and you are always better off contacting an attorney to discuss your rights in bankruptcy.
You might have read that you should spend your tax refund first. While generally true, you must be careful about how you spend that money. Do not rely on advice you read on the internet or hear from your family and friends (yes, even the ones who filed bankruptcy themselves). It is tempting to find a guide or a list of things to spend your tax refund on but an attorney can actually help you create a plan that is best for you. Your financial situation is always unique and you will be more successful if you set up a consultation with an attorney to go over all your options. Planning is the key to getting the benefit of your tax refund and getting out of debt!
If you are in debt and are getting a tax refund contact our office to discuss how you can use your tax refund to get out of debt. Call our office 785-856-8720 to talk to one of our attorneys today or to set up a FREE appointment.