Its tax season again. Many lucky individuals will be receiving a tax refund. So what does this mean if you are filing for bankruptcy? What many people do not realize is that the U.S. Bankruptcy Trustee may likely take your tax refund if you file for bankruptcy and then receive a refund. In fact, here in Utah, the tax refund is the most liquidated asset in bankruptcy cases. The only way to avoid losing your refund is to file for bankruptcy after already receiving your tax refund and spending it appropriately. If you do the opposite, you can bet your tax refund is going to become the property of the United States. The best thing to do before taking any action with your taxes is to speak with a Salt Lake City Bankruptcy Lawyer at Salcido Law Firm today.
Forfeiting Your Tax Return in Bankruptcy
Not all of our clients try to avoid the tax refund forfeiture. Believe it or not, some individuals are ok with contributing their tax return to the bankruptcy estate or want to delay filing the bankruptcy until long after their refund has come and gone. The other factor to consider is the time the case may be left open if the trustee has a refund to go after. Most Chapter 7 bankruptcies can be closed fairly quickly in a 3 month period or so. However, if there is a refund to go after, the trustee may keep the case open for much longer until the refund is captured.
Asset Advice from Salcido Law Firm
Tax refunds are common asset grabbed by the trustee’s office in bankruptcy. However, some other assets may be taken in bankruptcy as well. Before jumping into a bankruptcy, you should at least speak with a Utah Bankruptcy Attorney at our law office. You can get a free consultation with a member of our team right over the phone. We take the time to understand your concerns, goals, and can help you get through bankruptcy while maintaining the most assets you can under the law.