Can you pay to file bk with your tax refund?

[Momwife11]

Hello all, I'm new to the forum, heres a little back story my husband , two kids and I, live with my mother whom we don't get along with. We are both unemployed. I have been since getting fired while pregnant with our youngest who's now 1, he has been since april when he had his second back surgery in a yr. We need to get out of here but our credit , and his criminal record prevent it. (hes a convicted felon-nothing violent or sex related) before we were married I had 6 credit cards, I also have a car loan debt, and a phone bill. He has about $4k medical bills, from before we had medicaid, and about $2k to a rent a ctr type place, as well as a couple small debts. We also each owe a college about $1k each.....so a lot! My mom was getting help from family to pay utilities before we moved back and now even with my husbands unemployment we barely get them paid. We decided to file ch7 and met with a bk atty who told us it'd be $2k....well we don't have that. So im wondering,if we file when our refund comes next yr will that be ok or will that increase due to the refund make us unable to? Our refund last yr was about $2k.....

Thanks

[LadyInTheRed]

So im wondering,if we file when our refund comes next yr will that be ok or will that increase due to the refund make us unable to? Our refund last yr was about $2k.....

Welcome to Bkforum Momwife11! I don't understand what you fear will increase. But, you can use your tax refund to pay your attorney fees before you file.

You should consider whether it is premature to file BK. I assume you have no assets. With no income and no assets, it sounds like you are collection proof. There is nothing creditors can do to you. Are your child's and husband's medical problems resolved? Your biggest problem seems to be insufficient income which BK won't resolve. I know it is very difficult for felons to find employment. It would be a shame to file Chap 7 before you are on better financial footing and then incur more medical debt and not be able to file another BK for 7 years.

Since it sounds like you will have to wait until next year to file, you have some time to think about this. In the meantime, if you need advice on dealing with your creditors, you'll find lots of helpful advice in the "collections" forum.

[HHM]

yes, you can use your tax refund to file BK.

[Momwife11]

Ladyinthered, I guess that makes sense but I feel like we should file before we have anything so they can't take it in the bk....also if one of us returns to work can't the creditors put judgments on us and garnish wages, bank accts, and our car? And I want the debt off my back lol. The creditors dont currently bother us, they dont have our number.

[IHateChase]

Pretty sure they can't garnish you in NC. It's a pretty debtor -friendly state (unlike mine). Do double check on that tho.
I'm with LITR. You don't need to rush to file. Your priority should be getting yourself in a better place.
If you do need to file, you could consider doing it pro se or may even qualify for legal aid.

Good luck, and hang in there. Keep reading and asking. And WELCOME.

[Pjmax]

Hi Momwife11, even if you decide to wait, you can talk to a few attorneys now if you want. First BK consultations are usually free, you can ask questions, find out about fees, payment plans, what to expect, etc. And don't go with the first one. Take your time and find the one you feel most comfortable with. I would also suggest calling Legal Aid soon. I don't know what it's like in your state, but the wait time for an appointment here (NJ) is about a year and a half.
Best wishes.

[keepmine]

Ladyinthered, I guess that makes sense but I feel like we should file before we have anything so they can't take it in the bk....also if one of us returns to work can't the creditors put judgments on us and garnish wages, bank accts, and our car? And I want the debt off my back lol. The creditors dont currently bother us, they dont have our number.

Just because you have assets, doesn't mean you'll lose them in bk. NC has a nice little wildcard exemption that'll protect some cash.

http://www.thebankruptcysite.org/exemptions/northcarolina.html

Also, a previous poster is correct. Wages can't be garnished in NC.
Your most presing problem isn't debt but, lack of income. Regardless of wwhen you file, you still have to be able to support yourself post bk. I'd suggest you wait and get at least a minimal safety net under you.

[Momwife11]

I called legal aid before and they dont handle.bk. I read somewhere that a debtor could.get a garnishment order in their state and enforce it in nc?

[joshuagraham]

A tax refund is a receivable asset that you own - basically it is a loan to Uncle Sam, or one of his 50+ kids. Getting it back has nothing to do with the BK. With that said, however, if you file for BK and there is an outstanding refund to be paid back to you, then that cash is one of your assets that can be confiscatable by the trustee. (i.e., depending on the exemptions.)

[Avand18]

Eh don't be worried. If you file after you have received your refund, your trustee likely will ask where it went, and as long as it went to something that was NOT frivolous, e.g. Atty fees, they should not be able to touch it. Ex. I explained mine as being used to file and get caught up on mortgage + car payments. If you have a good attorney, they *should* brief you just before your 341 begins and make sure you are ready and able to explain this with confidence (a.k.a. so the trustee doesn't feel the need to dig further).