Income Tax Refunds and Chapter 13 Bankruptcy
Can I Keep My Tax Return in Chapter 13?
Each case varies upon individual circumstances but your bankruptcy trustee may make the decision based on that status of your case. If you are current on your repayment plan, it's likely you'll be able to keep a refund up to $2000. It depends on the length of your plan and your overall financial situation. If you are making enough to continue making scheduled payments accordingly and feel you are on track to meet financial requirements of your repayment plan, chances are you'll be able to keep your full refund if it is under $2000.
A portion of your refund could be used to ensure financial obligations are satisfied in the agreement. This decision is likely to be made by the court and your trustee upon reviewing your case. Sometimes unsecured debts in Chapter 13 bankruptcy are settled for less than the original amount. Depending on the time table of your repayment schedule, a portion of your refund could be used to help settle a debt that may not get a full payment.
Submit a Copy of Your Income Tax Information to Your Bankruptcy Trustee
You may be required to submit a copy of your income tax information to your trustee, even if you are not expecting a refund. Failing to follow through with your trustee about your income taxes could complicate your Chapter 13 bankruptcy. Questions and concerns should be reviewed with your bankruptcy trustee.
Have Any Questions About Your Tax Refunds and Chapter 13 Bankruptcy?
If you need assistance or have a question regarding your income tax refund and bankruptcy we can help. Feel free to submit your questions or set up a free consultation using our contact form