Bankruptcy and Tax Refunds
Some of the most complicated issues related to the bankruptcy process occur when a person tries to work through their tax returns after the changes associated with bankruptcy. In particular, many people may be unsure of whether they get to keep their tax refund after filing for bankruptcy. Although specific cases may call for further examination from a professional, there are some general rules regarding bankruptcy’s relationship to tax refunds.
If you are thinking about filing for bankruptcy, but want to consult with a legal advisor before proceeding, we would be happy to help. For a no-cost evaluation of your bankruptcy options, contact Florida bankruptcy lawyer Ryan J. Really, Attorney at Law, PLLC, today at (239) 237-0675.
How Does Bankruptcy Affect Tax Refunds?
When a person files for bankruptcy, their finances can change drastically over a relatively short period of time. As a result, their tax situation may rapidly change as well. In particular, the following may be important to know for anyone considering bankruptcy as a debt solution:
- Tax refunds may be seized in Chapter 7 bankruptcy depending on when bankruptcy is filed
- Tax refunds can be exempted in some situations
- Drastic changes in assets due to liquidation may radically change a tax refund
- A bankruptcy trustee and debtor may share paperwork burdens for tax purposes
- Being audited can disrupt the bankruptcy process
In many cases, a person may want to file their tax return prior to filing for bankruptcy. However, this depends largely on that person’s specific tax and financial situation. To really know what option is best, it is advisable to speak with a knowledgeable professional.
Bankruptcy may seem confusing and difficult, but with help from an experienced attorney, the process can be made much easier to handle. To learn more about whatever questions or concerns you may have regarding a bankruptcy filing and how it may influence your taxes, contact Florida bankruptcy attorney Ryan J. Really, Attorney at Law, PLLC today by calling (239) 237-0675.