Chap. 7 Tax Refund

[JoeKing]

Filing Chap. 7 Mar 1st with Spouse and 4 kids, surrendering house. I just filed my tax return and we are expecting $7200 Federal and $1000 State. Due to eFile, I would get this money before filing BK Chap 7. Is it a good idea to spend this money? Or should I wait until UST says it's alright to spend it?

I need this money as my rent money. Thanks in advance for all your knowledge & exeperience!

[albundy]

i spent mine. my ch7 has not been officially filed yet. i did make sure i only spent it on necessities like my 500+ electric bill, car payment, washing machine to replace the one that died. i only got 2100 though. it may have been a mistake, but since they were normal, common sense things i hope it will be ok.

i'm new to all this too, so take this with a grain of salt, but if you use only what you need and dont go on a shopping spree, i surely cant see the problem with it. your going bankrupt, you still have a life to live and familly to take care of. if you need to pay rent to keep a roof over your familly's head, i think it's more than justifiable.

[JoeKing]

Thanks Al.

My lawyer suggested to not look for a place to rent until after the BK discharged.

How can I keep this money for rent during the BK proceedings?

I like the common sense and essential expenses, such shoes & clothes for my kids.

I will talk to my lawyer this morning and let him know that I fild my taxes last night and expecting a refund. I will let you know his recommendations.

[StartingOver08]

There is a difference - Al has not filed yet so he is free to spend his tax refund before filing as long as he keeps the receipts. If the Trustee asks for the receipts, Al can provide them. The key here is Al received his refund BEFORE he filed BK.

On the other hand, JoeKing, you have ALREADY FILED. You have to do just as you were planning in your last post - contact the attorney to notify him you will be receiving a refund. The Trustee may or may not want the refund - but it is the Trustee's call. Don't spend it without something from the BK court saying they do not want your refund.

[keepmine]

Joe says he's filing March 1st.
First thing, ask your lawyer if the refund can be exempted.

[StartingOver08]

Joe says he's filing March 1st.
First thing, ask your lawyer if the refund can be exempted.

Thank you keepmine. I missed that the first time. ....Time to get off the computer.

[JoeKing]

S/W to my attorney. It's alright to spend my income tax refund because it's before my filing and I can use the wild card exemption of $21K asset. BTW, I am in California.

Thanks again for all your help!