WILL I LOSE MY TAX REFUNDS
IF I FILE FOR BANKRUPTCY?
The Short Answer: With proper planning - NO, you will not lose your tax refunds!
The Long Answer: To ensure that your tax refund is protected make sure you have a consultation with an experienced attorney.
(1) The WORST thing you can do - Is to pay family members large sums (anything over a few hundred dollars) with your tax refund (or with any other money/property) and then file bankruptcy. It is a one way street to misery. The bankruptcy trustee can take the money back from your relative! You are usally much better off filing bankruptcy and then paying the relative. It sounds backwards, but it is true!
(2) How much can you protect? - You can protect up to $11,200.00 of your tax refunds per person that files. So a single person can protect $11,200.00 and a married couple can protect up to $22,400.00.
(3) What if my refund is over the amount we can protect? - You are allowed to move your money around in a way that allows you to maximize your protections. This is called "exemption planning". It is 100% legal, ethical, and moral, if done in the right way and not taken to the extreme. During your free consultation we can discuss any issues surrounding any unprotected property and come up with a plan to ensure you get the protections the law allows!
The bottom line - We can protect all of your tax refunds in almost every case, we just have to do it the right way!