What You Should Do with Your Tax Refund If You Plan to File Bankruptcy

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If you are expecting to receive a tax refund before
filing bankruptcy you may be able to spend it wisely without causing legal headaches. There
are a few actions to consider when it comes to using your refund before
you file and this includes reviewing your intentions with your bankruptcy
attorney. You can get further insight on how to use your refund safely
to reduce the risk of having purchases scrutinized by the court.

This is important since there have been a large number of debtors filing
before receiving their refund. Tax refund payments may be considered part
of your bankruptcy estate. They could be used to satisfy creditors and
because of this, in some cases, you may be better off waiting until it
is spent before filing for protection. The following points are a few
aspects to consider in how to safely use your refund.

  • Use your refund with guidance from your bankruptcy attorney. This can help
    you get exemptions necessary that can help you keep your refund while
    establishing financial control even after your case is completed.

  • Bankruptcy filing fees: you may be able to use your refund to pay for necessary
    expenses such as retaining an attorney, credit counseling and financial
    management courses, and filing fees. These are expenses you can review
    with your attorney.

  • Making necessary payments and expenses: food, clothes, medications, and
    repairs to your home or vehicle may be purchases you can make with your
    refund. You may be able to catch up on other payments such as utilities,
    mortgage or the rent.

Reference:
http://www.txbankruptcyblog.com/2014/02/articles/debt-relief/how-to-spend-tax-refund-money-before-bankruptcy/

By | 2017-12-13T02:04:56+00:00 March 25th, 2014|Bankruptcy|Comments Off on What You Should Do with Your Tax Refund If You Plan to File Bankruptcy