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Filed bankruptcy. Was expecting a decent tax refund. Was told i will not get any refund.

Atlanta, GA |

Filed chapter 7 in December 2012. Filed taxes in Jan 2013. Told today no refund. Does bankruptcy affect tax refunds?

Attorney Answers 5


  1. Of course it does. And I'm sure your attorney discussed this with you, as the size of your refund often affects when you should file and even IF you should file (I hope you didn't make the mistake of filing pro se or filing with a lawyer and not telling them in advance about an expected refund).

    In some cases, adjustments to your exemptions can protect some or all of a refund, so discuss tyhat with your lawyer, and, if you don't have a lawyer, you need one IMMEDIATELY. Feel free to call me if you do not have one at 404-768-3509.

    If you find this answer helpful, please mark it here on AVVO as helpful. In answering you, I am attempting to communicate general legal information and am not representing you (and am not your lawyer). Do feel free to call me at 404-768-3509 if you wish to discuss actual representation (the phone call also does not retain counsel; that requires an office visit and appropriate paperwork). In that a forum such as this provides me with limited details and doesn't allow me to review details and documents, it is possible that answers here, while meant to be helpful, may in some cases not be complete or accurate, and I highly recommend that you retain legal counsel rather than rely on the answers here. (You can also email my office at geaatl@msn.com . An email also does not retain my office, but can help you get an appointment set if you prefer not to call). I am happy to discuss possible representation with you. Any information in this communication is for discussion purposes only, and is not offered as legal advice. There is no right to rely on the information contained in this communication and no attorney-client relationship is formed. Nothing in my answer should be considered as tax-advice. To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein. I am also required to advise you, if your question concerns bankruptcy, that the U.S. Congress has designated Ashman Law Office as a debt relief agency that can help people file bankruptcy.


  2. Sure it can - something to discuss with your Bankruptcy lawyer before filing (and now). Otherwise, we don't know what your tax returns state, the refund to which you are entitled, whether you properly listed the expected refund as an asset on Schedule B, how you planned your exemptions, etc. Presumably, you went to your first meeting of creditors and one of the questions asked was whether you expected a refund.


  3. The IRS is sending the refund to your trustee. Do what your attorney tells you to do so she can amend your schedules to exclude the refund from liquidation and get it back up to the exemptable amount.

    The DiGiulio Law Firm, LLC. Phone: 888-540-4529 Website: www.atl-law.com Atlanta, Marietta, Lawrencevile, Duluth, Alpharetta, Buckhead The above answer is for general information purposes and is offered as a service to the public. Nothing on this or associated pages, documents, comments, answers, reviews or other communications, including the above post, should be taken as legal advice for any individual case or situation or relied upon as a substitute for engaging legal counsel, nor does it constitute advertising or a solicitation. Viewing the general information here, including your receipt or transmission of information hereof does not alone create or constitute an attorney-client relationship or ensure confidentiality. Please contact 770-309-9551 for additional questions or to schedule for your free phone consultation. If this question or answer pertains to bankruptcy, please be advised that we are a federal debt relief agency. One of our areas of practice is to help people file for bankruptcy relief and protection under the U.S. Bankruptcy Code.


  4. Yep, you filed smack dab in the middle of tax refund season for bankruptcy trustees (when they make their money).

    A tax refund is an asset. Assets are either exempt or non-exempt in bankruptcy (or not part of the estate in the first place). Unless you state provides a catch all exemption (wild card, or cash exemption), then the chapter 7 trustee takes a pro-rata share of your tax refund.

    Note, certain parts of your tax refund might be protected, Earned Income Tax Credit, Child Tax Credit etc.

    Get with your attorney, or go see attorney to sort out your options. If you do nothing, sounds like the tax refund is going to the trustee.


  5. While tax refunds go to the trustee in almost all chapter 13 cases, refunds in chapter 7 are handled differently. When filing chapter 7, you usually exempt any assets you don't want the chapter 7 trustee to liquidate and use to pay creditors. This time of year, trustee's ask about refunds and look to take them if you have not exempted it. However, the IRS will not send these to the trustee directly, and the trustee has to take steps to get the refund, so I am not sure why you say you are not getting it. If you just thought you were entitled to a refund and the filed return says you will not get one, that does not affect your bankruptcy case. If someone is taking your refund, you need to get with your attorney to see who it is and if there is any way to keep it.

    The above information is general in nature. In order to obtain more specific and legal advice upon which to base your important decisions, please contact our office directly for a free phone or in person consultation. Robert M. Gardner, Jr. Hicks, Massey & Gardner, LLP hmgrmg@yahoo.com 53 W. Candler St. Or 718 Oak St. Winder, Ga. 30680 Gainesville, Georgia (770) 307-4899 (770) 538-0555 gadebtlaw.com hicksmasseyandgardner.com serving metro Atlanta and all of Northeast Georgia Bankruptcy, Divorce, Personal Injury, Worker’s Compensation, Medical Malpractice, Adoption, Civil and Criminal Litigation

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