Question about EIC tax refund

[Seeker40]

I filed CH 7 pro se at the end of March and my 341 is in a few weeks. I have not filed a tax return for the past 2 years simply because my income was only about $6000 a year due to health reasons.

Today I thought I may as well get them caught up to have them for the trustee and to my surprise it appears I am entitled to about a $1500 refund from 2007 and a $2000 refund for 2008. This refund is all from Earned Income Credit. This refund would be a Godsend, as I am having to borrow $$ from my mother just to pay my rent every month and I barely have enough for food ( I am currently attempting to get SS Disability but it is a very slow process).

In my state there are no exemptions that a tax refund would fall under, what are the chances the trustee would take this refund? I would rather get my BK dismissed if there is a chance I could lose this money because I need it that bad. Any thoughts?

[krielly]

What state are you in?

[OregonMom]

I believe in Oregon they can take your tax returns, I am lucky enough to owe again this year so it wasn't an issue!

[fltoo]

This is the Achille's heel of calling a welfare credit a tax "refund". There are many other problems for people regarding this in our screwed up tax laws.

How can the government justify calling this a refund when no money was paid in taxes to refund? This has been a thorn in my tax paying side since all these "tax credits" have come about.

This money is for the welfare of lower income families, should not be called a refund and should not be taken by a BK trustee.

I would love to see someone fight this and establish case law on it.

[fltoo]

I believe in Oregon they can take your tax returns, I am lucky enough to owe again this year so it wasn't an issue!

They can have my "returns" as long as they let me keep my money I paid in taxes.

[JoeBankrupt33]

In some states, this is considered welfare in a BK. I know you can keep it in Idaho because of this.

We really need to know what state you are in.

[Seeker40]

I am in Colorado and after researching things further I did find where Earned Income Credit is exempt. Hooray!

[JoeBankrupt33]

Seeker,

I'm in CO too, and I'd be happy to help out if I can. Just PM me.

[UhhhOhhh]

I believe in Oregon they can take your tax returns, I am lucky enough to owe again this year so it wasn't an issue!

No. In Oregon the EIC or any money that can be shown to have been derived from EIC is exempt.

[fltoo]

I had no experience with this, so I am glad to hear some states exempt it.

Seems silly to take taxpayer's money, give it to people for the welfare of their families and children, and then have some trustee take it to give to a creditor. Makes no sense.