When to File and Tax Refunds
Hi,
I'm new here and trying to decide what to do. I just lost my major client (self-employed) and have lost all but one of my backups in the past six months. They are all going out of business. Capital One is suing me on January 12 for $1500 and I have about $20,000 in other debts and now no real income (maybe a few hundred this month). Because of decreases in income that have been happening for the past couple of years, I am only current on my rent and utilities. I am two weeks behind on my car. I have another $6,000 in emergency room bills as well and current medical insurance that I'm not sure I can keep after the next month or two. I am a single/divorced mom of four, one child will be off to college in September (grants, scholarships), and my ex pays hardly any support. With no job and little support, I am currently about $1800 in the hole for this month and each month going forward until I can replace my clients or get a new job.
I cannot pay a lawyer, so I was planning to file pro se as soon as possible. I expect to file for and receive a tax refund of about $6000 by the end of this month/beginning of February. I wanted to use that to live off until I'm earning again, but in Pennsylvania, a creditor can freeze a bank account after receiving a judgement. This means I can't have the refund deposited into my account, and now I'm confused about whether I can file chapter 7 next week and then file for my refund on the 17th and keep the refund.
Here are some questions:
1. Can my refund be taken in the bankruptcy?
2. Can I use federal wildcard exemptions to cover it, or do the exemptions only apply to refunds received before I file chapter 7? I would use the leftover federal homestead exemption ($10,000 plus) for this, though I don't own my home. I was told on another forum that I could do that.
3. Can I also exempt next year's refund with the wildcard exemption? I have no other assets but I do have a car I want to keep. It's currently worth about $7000 and I owe about $5000 on it. I need it to take my kids to school. Not much public transit here.
4. If I claim an exemption on the refund, can the trustee somehow override it?
5. Legal Aid in my area can help me with the case if I can wait several months because of the current backlog. Is it better to wait and just give up use of my bank account and accept that Capital One will get its judgment? I can put the tax refund on prepaid cards, but I haven't heard great things about them.
I would appreciate any insight anyone can provide. My priority is keeping the refund so I can survive right now, but I'm in a panic over the lawsuit and the possible seizure of my account. Am I right in feeling like I have to file now?
Thanks for reading all of this. I'm sorry it's so long.
Nikki
I'm new here and trying to decide what to do. I just lost my major client (self-employed) and have lost all but one of my backups in the past six months. They are all going out of business. Capital One is suing me on January 12 for $1500 and I have about $20,000 in other debts and now no real income (maybe a few hundred this month). Because of decreases in income that have been happening for the past couple of years, I am only current on my rent and utilities. I am two weeks behind on my car. I have another $6,000 in emergency room bills as well and current medical insurance that I'm not sure I can keep after the next month or two. I am a single/divorced mom of four, one child will be off to college in September (grants, scholarships), and my ex pays hardly any support. With no job and little support, I am currently about $1800 in the hole for this month and each month going forward until I can replace my clients or get a new job.
I cannot pay a lawyer, so I was planning to file pro se as soon as possible. I expect to file for and receive a tax refund of about $6000 by the end of this month/beginning of February. I wanted to use that to live off until I'm earning again, but in Pennsylvania, a creditor can freeze a bank account after receiving a judgement. This means I can't have the refund deposited into my account, and now I'm confused about whether I can file chapter 7 next week and then file for my refund on the 17th and keep the refund.
Here are some questions:
1. Can my refund be taken in the bankruptcy?
2. Can I use federal wildcard exemptions to cover it, or do the exemptions only apply to refunds received before I file chapter 7? I would use the leftover federal homestead exemption ($10,000 plus) for this, though I don't own my home. I was told on another forum that I could do that.
3. Can I also exempt next year's refund with the wildcard exemption? I have no other assets but I do have a car I want to keep. It's currently worth about $7000 and I owe about $5000 on it. I need it to take my kids to school. Not much public transit here.
4. If I claim an exemption on the refund, can the trustee somehow override it?
5. Legal Aid in my area can help me with the case if I can wait several months because of the current backlog. Is it better to wait and just give up use of my bank account and accept that Capital One will get its judgment? I can put the tax refund on prepaid cards, but I haven't heard great things about them.
I would appreciate any insight anyone can provide. My priority is keeping the refund so I can survive right now, but I'm in a panic over the lawsuit and the possible seizure of my account. Am I right in feeling like I have to file now?
Thanks for reading all of this. I'm sorry it's so long.
Nikki
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