Tax refund etc...

[button08]

We have retained an attorney but need time to file tax return and gather all the info. for the BK paperwork, at what point should we tell creditors that we are filing? Also, if we file our tax return prior to filing BK will we be able to keep the refund? We had to close our business and my husband is unemployed now and we will need the refund to pay our mortage, auto's, his child support etc...

[jcj112562]

File before, and spend the refund for required things (food, advance month's rent, insurance prepayment, etc.) so that on the day you file, there is less cash on hand than you can exempt. If you file after, it more than likely will be surrendered to the trustee if you can't exempt it. I could be wrong, but that is what I would be doing in your shoes..

John

[lrprn]

This is a question you have to ask your own lawyer. The right thing to do in this situation varies across the country depending on your trustee's and local court's customs and habits around tax refunds. Your lawyer will know what to expect with *your* trustee in *your* local court.

[ScaredINMich]

We are in this situation, but it LOOKS like we will be able to exempt it. We get $11,000 each for exemptions, so our $5k return fits into that range. BUT....that being said, we are not keeping our home, no equity in our ONE car so we could use that cash as our exemption.

Every state is different.

[Gigi1999]

We filed Ch 13 in December of 2008. We made our first payment Jan. 2009. And we had to pay our Trustee every single penny of our Federal refund that April ~ all $4500 of it. We got to keep state.