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Is a tax refund counted as income for the Chapter 7 means test if it is received within 6 months of filing.

Santee, CA |

Had planned to file for Chapter 7 very soon and do pass the means test based on my salary. However, I recently received a small tax refund and have meet with 4 different lawyers and two said a tax refund is income as well as an asset and must be counted as income (line 10a means test). The other two say it is just an asset and not counted as income. If I have to count the tax refund as income I no longer pass the means test. In doing research on the internet I have also found plenty of lawyers who say it is is income and just as many who say it is not. I would like to file soon but I don't feel like I can unless I can get some caselaw or codes that clearly say if a tax refund is income . Please help.

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Attorney answers 3



Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.


You know what they say....the 10th lawyer you meet with is alway the charm!
But in all seriousness, an anticipated tax refund is an asset that should be disclosed on your personal property schedule. It is not income, but rather a reflection of overwithholding of income taxes and/or credits you may be entitled to for various reasons. If you regularly receive large tax refunds, it may be prudent to schedule those in your income schedule if such additional "income" can be offset with necessary living expenses. Most people who receive refunds have them earmarked for deferred expenses (auto maintenance, doctor's visits, home maintenance projects, etc.) An experienced bankruptcy attorney can easily guide you through this issue.
Best of luck.


No ... it was already income when you earned it and paid it toward your taxes.
If you're not really referring to a "refund" but instead a gift from the govt (taxpayers) in the form of an earned income or child care tax "credit", then yes ... it is income.

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