I had been putting off filing for Chapter 7 bankruptcy as I had gotten a new job that paid well and I'd be able to pay off my debts. However, I got laid off yesterday. A couple days ago, I filed my federal income taxes. Last year, it was taken by another state for overpayment of unemployment benefits (long story). If I file for bk asap and notify those 2 agencies immediately showing that I filed for bk, is it possible to prevent them from taking my federal tax refund? I really could use it. Also, I'm worried that now that I have to file unemployment, that the other state will garnish it and I'll be out of any and all income until I get a new job.
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Whether the other state will be able to garnish your tax return, I can't say, but I CAN tell you that your tax return will become part of your BK Estate, and if you owe back taxes, the trustee will apply it to any back taxes, state and Federal, that you may owe. It is also possible that the other state's unemployment benefit agency will make a claim against your BK Estate, since you have to list everyone that you owe.
Make three or four appointments with different BK attorneys and get their opinions. Most attorneys will offer an initial free consultation.
Good wishes!"To go bravely forward is to invite a miracle."
"Worry is the darkroom where negatives are formed."
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