What Happens to my Tax Refund in Bankruptcy?

Bankruptcy Attorney Dayton, Oh

When you first begin to file for bankruptcy, prior to doing so there are a few things that you are going to discover. First, you will learn that there are several different types of bankruptcy. It has to be determined if you are eligible for a chapter 7 or chapter 13 bankruptcy. This is going to dictate how your tax refund will be handled in your bankruptcy proceeding. What is more important when it comes to your refund is the timing of your Ohio bankruptcy and how you are going to receive it.

Tax Considerations

In your bankruptcy proceedings you must declare all of your assets, and the fact that you are going to be receiving a tax refund may be considered an asset. The bankruptcy laws can be really complex and this is one of the reasons you want to use the services of a good bankruptcy attorney.

Your assets may be sold off so the money gleaned from them can be used to pay your creditors. This is what may happen with your tax return. In regards to the timing it all depends in what year you are going bankruptcy and how the tax return relates to this. Any tax refund that you receive after bankruptcy is not included in your bankruptcy filings. This can be difficult to understand and it is something that your legal counsel will help you with in knowing what will happen with it. It is important however, that you do declare your return in your bankruptcy.

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