Columbus, Ohio Chapter 7 Bankruptcy & Chapter 13 Bankruptcy Lawyer
The Columbus Bankruptcy Lawyer
ATTORNEY SCOTT R. NEEDLEMAN
Income Tax Refunds & Bankruptcy
When considering bankruptcy in Columbus, Ohio, it is important to know how your assets will be treated. Along the same lines, you should become familiar with how the court will deal with your tax refunds if you file bankruptcy.
Whether or not you lose your refund depends on many factors. Generally speaking, filing for Chapter 7 Bankruptcy allows you to protect a tax refund, thus you keep your tax refund in bankruptcy. On the other hand, this is not typically the case with Chapter 13 Bankruptcy.
In addition to the type of bankruptcy you are filing, there are other details your trustee will take into consideration, including when you are filing for bankruptcy as well as the steps you take to protect the refund.
Chapter 7 Bankruptcy and Tax Refunds
When you file for bankruptcy, your refund, even if you have yet to file for that year, is considered an asset by the court. Just the same as other assets, if your refund is exempt the court does not have the legal right to take it from you.
The allowable exemption amount is different in each state, therefore Ohio bankruptcy exemptions must be utilized to determine the actual amount of your refund will have a lot to say about whether or not you can keep it.
Chapter 13 Bankruptcy and Tax Refunds
With Chapter 13 Bankruptcy in Columbus, Ohio, you can expect your bankruptcy trustee to closely monitor any refunds due to you during the life of your repayment plan, which typically lasts three to five years.
If you get involved with a repayment plan that pays less than the total amount of your debt, the trustee may keep your refund. Furthermore, a Chapter 13 filing requires that all disposable income be made available through the plan. Unfortunately for the person who is filing, tax refunds fit this mold.
Tax refunds are treated differently based on the type of bankruptcy you are filing, as well as where you live.
Tax Refunds in Columbus Bankruptcy
Are you confused as to how your refund will be treated by the bankruptcy trustee? Consult with an experienced bankruptcy attorney in Columbus who can review your case, help you decide which type of bankruptcy is best, and then make it simple for you to understand what will happen to your refund this year and in subsequent years.