Tax refund and bankruptcy? Here’s how to save your money | On your debt
It comes back every tax season. You can’t wait to get a big tax refund check and you’re also working hard to get your bankruptcy case filed. So what happens to your tax refund in the event of bankruptcy?
If you have NOT received your tax refund by the filing date, the trustee will be entitled to the tax refund when you receive it, unless your lawyer can help you exempt the money to be refunded. At Bond & Botes we can do this, so this is just one of the many reasons why you should use an established and experienced bankruptcy attorney when filing for bankruptcy protection.
Want to keep your refund? Spend it.
Your refund can generally be used for a variety of expenses, including most common household expenses, such as:
· Use your tax refund to pay your bankruptcy attorney’s fees and costs for your case.
· To rent
Medical and dental expenses
Home maintenance and repair
Car repairs and maintenance
Expenses that are generally not allowed include:
· Luxury products
Reimbursement to a friend or family member
Prepaid expenses (for example, you cannot pay multiple rents), or
· Reimbursement of a credit card.
If you file during tax season. People who declare bankruptcy during tax season often have to figure out what to do with the tax refund they just received.
Use an exemption to protect reimbursement
You should be able to keep your entire tax return by declaring it as exempt property that the trustee is not allowed to use. Alabama has a generous generic exemption that covers any property you choose that you might use to cover a tax refund.
Learn more about holding your refund
As with any major court decision, be sure to consult a reputable and experienced attorney to advise you in this matter.
Bond & Botes helps people struggling with debt
If you’re struggling with debt, we’re local and offer a free, confidential face-to-face consultation with an experienced attorney. We also offer free consultations in the comfort and safety of your home or office by phone and/or video if you wish. Let us solve your financial problems. There’s no obligation, and that means there’s no downside to gathering the information you need to make good decisions about how to break the cycle of debt stress and go forward. We can answer all of your questions regarding Chapter 7 bankruptcy, Chapter 13 bankruptcy, stopping a foreclosure or wage garnishment, avoiding liens, stopping a lawsuit, l medical debt, personal loans, payday loans, credit card debt, etc. We can relieve your stress! We want to help you, and we can help you!
The State Bar of Alabama requires the following: “No representation is made that the quality of legal services to be provided is superior to the quality of legal services provided by other attorneys.
Bond, Botes, Sykstus, Tanner & McNutt, PC
102 South Court Street, Suite 314, Florence, AL 35630
Telephone: 256-760-1010 • Fax: 256-760-1023
Opening hours: Monday to Friday • 8:00 a.m. to 5:00 p.m.
No representation is made that the quality of legal services to be provided is superior to the quality of legal services to be provided by other attorneys.