Glasgow, KY asked in Bankruptcy for Kentucky

Q: In Kentucky, If I file a chapter 13 bankruptcy, but marry after filing, how do the wife and I split the tax refunds?

I have to pay my refund into the plan. 96% of the income is mine, but all of the tax deductions and tax breaks are hers.

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2 Lawyer Answers
Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY
  • Licensed in Kentucky

A: Split the return 50/50. It’s now marital money. Your 50% will still have to be paid into the plan. She will need to file an injured spouse form as well.

Nick Curtis Thompson
PREMIUM
Nick Curtis Thompson
Answered
  • Bankruptcy Lawyer
  • Louisville, KY
  • Licensed in Kentucky

A: In the Western District of Kentucky, it doesn't matter. The refund is paid to the Trustee if you don't have a 100% plan. You get to keep the fees for preparing the return and the earned income credit. You lose the child credit. You should increase your deductions during the year so you don't get a refund. The failure to turn over the refund and to file a budget is the basis for the Chapter 13 trustee filing a motion to dismiss your Chapter 13 case.

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