Potential Tax Refund and Chapter 7

[cjsgac]

Ok so here is my story: filed what we had hoped to be a Chapter 7 in 8/10. Our case is now with the UST. They are still clarifying some income issues. So we have been stuck in limbo since August.

We would like to file our taxes. We usually receive a refund of around $5000. I understand that we give our tax return to the UST, but if we do receive a refund, are we entitled to any of it?


Thanks.

[free2breathe]

The bankruptcy estate would be entitled to the portion up to the filing date, so roughly about 2/3 of it, unless you have exemptions that will cover it.

[tcreegan]

Hi cjsgac,

The BK estate is entitled to 7/12ths of the refund (Jan-Jul)...but in CO not any part that comes from EIC or the child tax credit. (CRS 13-54-102(1)(o)

I would also love to see someone claim that a tax refund is 'earned but unpaid' wages. If you can get that to stick, then in CO the trustee can only get 25% of the refund.

Hope this helps,

Tom in Colo