It's that time of the year when people use their tax refunds to file for bankruptcy protection, or to get ahead after their bankruptcy case has been discharged.Whether you can keep your tax refund depends on questions that you should be prepared to answer before your case is filed with the bankruptcy court in Atlanta.
WHEN DID YOU RECEIVE THE REFUND?
CHAPTER 7 BANKRUPTCY
If you received the refund before your case was filed, then use the refund to pay your normal monthly expenses and your bankruptcy attorney. If any portion of your tax refund remains after you pay those expenses, see the discussion below about exemptions.
CHAPTER 13 BANKRUPTCY
If you received your refund before your case was filed, you should be able to keep the refund. However, if you received the refund after your case was filed the IRS will likely send that refund to your Chapter 13 Trustee. The Chapter 13 Trustee will then apply that refund to your case.
HOW MUCH IS THE REFUND?
CHAPTER 7 BANKRUPTCY
During the preparation of your bankruptcy petition, you will itemize all of your personal property that has value. Each piece of your property is then protected with "exemptions." The available exemptions are limited. For example, the motorized vehicle exemption in Georgia is $3,500 for a single filer. What happens if you have more than $3,500 of equity in your motorized vehicle? We would use the "wild card exemption," which is $5,600 for a single filer. There is no specific exemption for a tax refund, so we would use the wild card exemption to protect your refund. If your refund is less than $5,600, then the refund should be protected from the Court's control. If your refund is above $5,600 the Chapter 7 Trustee will likely take your refund for the benefit of your creditors. As you can imagine, there are many exceptions and caveats to this general explanation. Contact us for more information.
CHAPTER 13 BANKRUPTCY
If you received your refund after your case was filed, your refund will go directly to the Chapter 13 Trustee.
You deserve a fresh start! Use your tax refund to make 2010 a debt free year! Call Angel today for a FREE consultation (404) 680-7010.
Van Wieren Law Firm, LLC - Atlanta Bankruptcy
http://www.metroatlantabankruptcy.com/
Van Wieren Law Firm, LLC - Atlanta Bankruptcy
http://www.metroatlantabankruptcy.com/
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