Tax Refund Question

[kila1980]

Hello,

My husband and I are waiting until we get enough money together to file for Ch 7 BK. I was wondering though when should I file? Before or after we file taxes? I do not want them to get our refund. I also expect to get my exhusband's refund as well since he is behind on child support. So when would be better? Also should I have them direct deposit my refund into my account or get a paper check or can I have it deposited somewhere else like my mom's checking. I don't want them to see that big deposit going in and try to take it.

[tcreegan]

Hi kila,

The general rule on tax refunds is, if you can't exempt it, get it in, get it spent. (on legit expenses of course) I don't know of any Ill exemptions to protect a refund so I would imagine you are in the 'get it in, get it spent' category.

or get a paper check or can I have it deposited somewhere else like my mom's checking. I don't want them to see that big deposit going in and try to take it. ...probably not going to work b/c the trustee gets to see your tax return. Last years tax return is req'd in a BK (and more yrs if they ask for them) Don't worry about the big deposit, just document how it got spent. Housing, vehicle, dental, medical, taxes, or best of all...a good BK attoreny! Don't pay off a creditor, especially not unsecured, no $$ going to family or friends, no luxury goods.

Exhubbys refund is back child support which is exempt. Trick is to keep it separate from you other money. Once it 'co-mingles' it can lose exempt status, or at least can complicate things.

Good luck w/ your filing!

Tom in Colo

[747LUVR]

Our atty filed the petition electronically on friday....went on to PACER and found our case #. we're due back a tad over $3700....our atty said to file the tax return, and bring a paper check with our 2010 fed return. I asked our atty if the trustee will take a percentage or 1/2 or whatever, he didnt know. Now i'm thinking of filing and spending it prior to the 341, but dunno if that would really work. we dont really have any major expenditures, and i cant understand on my petition what is exempt to the point it may be covered. what would you folks do, spend it, or just bring in the whole darn check in with me to the 341? thanks in advance.

[chicagoannie]

Hello,

My husband and I are waiting until we get enough money together to file for Ch 7 BK. I was wondering though when should I file? Before or after we file taxes? I do not want them to get our refund. I also expect to get my exhusband's refund as well since he is behind on child support. So when would be better? Also should I have them direct deposit my refund into my account or get a paper check or can I have it deposited somewhere else like my mom's checking. I don't want them to see that big deposit going in and try to take it.

Others will advise you as to when to file, but I can tell you that if you receive the Earned Income Tax Credit, in Illinois, that is exempt, so the trustee cannot touch that portion of your refund. Depending on the total of the rest of your exemptions, you can then exempt the rest of the refund as part of your wildcard.

[chicagoannie]

Also, the trustee will demand to see your tax return, so there is no hiding what the refund will be; depositing it into someone elses account won't work...and thinking of hiding ANY assets during a bankruptcy proceeding is not recommended.