Asked in Bankruptcy and Tax Law for Indiana

Q: Will I lose my tax return??? Filed chapter 7

I filed chapter 7 last month and last week filed taxes. I do expect a decent tax return due to having kids. Debt was mostly medical Bill's. I was getting grief from a lawyer for one of my non medical Bill's debt (was a gym) and do have a student loan from a school closed due to school being fraudulent. I meet trustee next week. And have yet to receive my tax return. I know the eic portion is protected. Was curious about the rest. Or if due to the fact most of my debt was charged off medical Bill's if they would proceed with taking my tax return. Tax return was almost 8k between state and federal and my debt was 22k with almost 12 of that being the medical. I do have a car I plan to reaffirm as well. My current lawyer says "let's see what trustee says" that I might not nessicarly lose it or I could lose part of it...

Related Topics:
3 Lawyer Answers
Stuart Nachbar
Stuart Nachbar
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Livingston, NJ

A: The answer depends on if same was exempted out. Some states follow the federal exemptions and some go with State Exemptions. Talk to your counsel about same and make sure it was properly exempted out.

D. Mathew Blackburn
D. Mathew Blackburn
Answered
  • Tax Law Lawyer
  • Englewood, CO

A: 75% of the refund is an asset of the bankruptcy estate. There is an exemption for the Earned Income Tax Credit. Whether you're able to keep any additional amounts will depend on your other assets as IN only allows a $350 single $700 married exemption for intangibles.

Sometimes the Trustee has the right to seize amounts and they choose not to for administrative efficiency. It's just not enough to deal with since the Trustee gets a percentage but then must notify creditors that a dividend is available and deal with all those filings.

I would listen to your attorney, that's why you hired them.

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: You may be able to protect most or all of your refunds with your e emotions. Check with your lawyer and make sure they’ve been properly exempted out in your petition.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.