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Your Tax Returns In Bankruptcy

Your Tax Returns In Bankruptcy

: Richard West Law Office

TaxesWhen you are in such a tight financial situation that it is leading you into bankruptcy, perhaps the only pleasant thought that exists at the moment is that you are going to be getting a good tax refund. Then the question arises as to what is going to happen to this in your bankruptcy.

Income and Assets

First, remember that the moment you file for bankruptcy all of your assets are going to be taken into account which is going to include your tax return. You may want to hold off on the filing of this legal recourse until you have received your tax return, and allocate the funds from it to something that is going to benefit you at the moment. This should not be making payments to your creditors who are soon going to be involved in your bankruptcy actions.

You should allocate it to household expenses that are important right now. You could put it towards your rent or mortgage payments, which may mean keeping the roof over your head. If you have some urgent medical or dental care that is going to cost you money then the tax refund would be a source for paying for this. Think about how you are going to spend this money and do it wisely. Don’t just go out and blow it on frivolous things. How you have spent it will be taken into account once you file for bankruptcy, and if it is not to the trustee’s liking he could order the sum of money to be put back into the assets.

Be sure to speak with a bankruptcy attorney in Dayton prior to filing for bankruptcy and bring to his attention that you expect to receive a tax refund check, or that you recently did receive one.