For many taxpayers, an annual refund is an important part of financial planning for the entire year. This can make it difficult to plan for bankruptcy. Tax refunds can be an asset subject to the liquidation powers of the bankruptcy court. However: with careful planning, a tax refund can be protected from the bankruptcy court, and a debtor can both achieve a successful discharge of debts in bankruptcy and keep his or her tax return. Contact experienced Missouri bankruptcy attorney Kenneth P. Carp to learn more about how bankruptcy laws may apply to your particular financial situation.
The Many Ways to Protect a Tax Refund From the Bankruptcy Court
All assets a debtor holds at the time he or she files for bankruptcy are subject to the liquidation powers of the bankruptcy court. This includes a tax refund, which is based upon income earned prior to the filing of a bankruptcy petition. If the tax refund is based upon income earned after the debtor received a final discharge of debts, the
