Tax Refund: Is it considered "income"

[BrokeOR]

Looks as though we'll be getting a tax refund this year, due to mtg interest paid and mortgage interest deduction and a huge drop in income.

Question: We are just under the income to qualify for a Chapter 7. Won't be filing until May or June, but refund will come before that. Will the trustee look at this as "income"?

We are surrendering our home. Have about $600,000 in debts, $130,000 unsecured.

Anyone with experience with this one?

[JEM]

I think the answers on this will vary depending on where you live...

but I've asked 3 attorney's so far, and they've all said "no".

So in my area of TX, I guess it's not.

[ToughTimes]

It seems to me that those having to give their refunds or part of their refunds to the trustee are giving the trustee an asset that just happens to be cash.

I don't see how moneys originally accounted for as part of gross income (on your paystub or W-2) can rightully be counted a second time as income if they are refunded to you.

The usual procedure appears to be to spend the refund wisely prior to filing. There are many threads on that topic.

[HHM]

ToughTimes has it right, tax refunds are not considered income for BK purposes. It is not new money, it is money that was withheld from income you already earned.