By Christopher C. Carr, Esq. Chester County bankruptcy attorney.
So you filed a Chapter 7 bankruptcy and then filed for a tax refund for the same year. YOUR REFUND NEVER ARRIVES. Surprise Surprise! The bankruptcy trustee had it directed to him. A trustee’s primarily job is to represent your unsecured creditors and he/she can submit a request for your federal tax refund on behalf of the bankruptcy estate and distribute the funds to them.
Think about it, when you file for bankruptcy what is the no. 1 thing the trustee is interested in? Your INCOME of course. And what is a tax refund really but INCOME that you let Uncle Sam hold for you (interest free). The trustee under most circumstances is entitled to it.
Could this have been avoided? The answer is most certainly “yes” with a little planning. Unless an emergency bankruptcy has to be filed to save a home from Sheriff’s sale or a car from repossession, most clients have a good deal of time between the time they come in to meet with me for the first time and filing. A good bankruptcy lawyer will examine your most recent tax return to see if your refund is too high. If so, I will advise you to immediately reduce your payroll tax deduction (by increasing your exemptions on your W-4 withholding form which you have the right to do at any time.) This will put money in your pocket NOW and you can likely show a tax refund small enough so that your trustee will not even bother with it.
Law Offices of Christopher C. Carr, MBA, P.C., is a quality bankruptcy and debt relief practice, located in Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester, Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at email@example.com today!
I also provide Mortgage Modification Services.
Other Attorneys Blogging on the Letter T Include: .
- Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell T is for Transfers.
- Bankruptcy Lawyer Jay S. Fleischman T is for Trustee.
- Kauai Bankruptcy Attorney, Stuart T. Ing T is for Taxes.
- San Mateo County Bankruptcy Lawyer Cathy Moran T is for Tension.
- Metro Richmond Consumer and Bankruptcy Attorney Mitchell Goldstein T is for Thirteen.
©Christopher C. Carr, Attorney at Law, 2012, All Rights Reserved. See Disclaimers.
Photo by Jetheriot