Tax refund money?

[Rain2674]

Hello everyone

I searched thru the forum for a while but i couldn`t find anything income tax related other than treads about owing to IRS.
WE are planning to file chapter 7 in Arizona, but we can`t afford it yet. Our last tax refund we already used up to pay bills, and our morgage just got modified, permanently, so we will need to free up some cash in order to survive and keep our home.
We wanted to wait till february to get tax refund, and i was wondering what can we spend it on? It`s going to be at least 3 or 4 K of refund, and i don`t see how can we spend that much money on food. We will need a money to pay attorney because there is no chance we can save that much in the next 20 years to pay from our paychecks.
What can you actually pay for from tax refund money? Are you allowed to pay of some debts that you don`t want to go on BK?
Thanks in advance.

[wonderingrov]

Mine went to pay the lawyer and to pay for some auto repairs. My lawyer said that would be no issue.

[tay666]

Yeah.
The money is actually much easier to spend than you think.
Pay your lawyer. Get your cars fixed. Go to the dentist. Go to the eye doctor.
Need to make any repairs to your house?
Trust me, that money will go fast.

[LSUTiger32]

Agree with what has already been said. Just be aware that depending on when you file and what state (I don't know Arizona law) that your income tax refund will likely make you an asset case and you will be giving most of it to the TT.

We got a total of $5,600 back from state and federal and the TT helped himself to $4,000 of it. Filed in August '09, and he took it from this years refund which was for the '09 tax year.

[Rain2674]

But if you already spent the money by the time you are filing for BK and used it to pay for the filing fees, how can they do that? I guess by that time there is no assets left in order for it to be an asset case?
And if BK gets discharged before the time comes to file tax return for new year, isn`t the case over with? How can TT take money back after discharge?

[newbie2]

But if you already spent the money by the time you are filing for BK and used it to pay for the filing fees, how can they do that? I guess by that time there is no assets left in order for it to be an asset case?
And if BK gets discharged before the time comes to file tax return for new year, isn`t the case over with? How can TT take money back after discharge?

I believe the OP is stating that they will file next year, so are worried about next years refund.

[tay666]

Yes.
In some states and districts, the trustee will claim a percentage of next years tax return.

Say you file in June.
The trustee would take 50% of next years tax return.
As half of this years tax payments are technically part of the BK estate.

Not all states or districts do this though.
And if you file early in the year therre isn't much percentage for him to take.