Tax Refund in Bankruptcy: If I File for Bankruptcy, Will I Lose My Tax Refund?

What will happens to a tax refund in bankruptcy filings? This is a common question for many clients as 2014 comes to a close, and individuals look forward to the upcoming tax refund that they may receive in between late January and April. For those individuals filing bankruptcy in the Western and Eastern Districts of Kentucky, we use the federal exemptions in the petition to protect assets. In most cases, there are plenty of exemption amounts to help keep this asset safe from creditors and the bankruptcy trustee. The most important thing to remember is that it is NEVER appropriate to transfer funds, or repay relatives with this money or it could cause major issues in a bankruptcy case.

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If you’re contemplating filing for bankruptcy in Kentucky, you need to beware of the possibility that a current creditor with a judgment against you, could potentially get a garnishment against your bank account. This means that they can sweep all tax refund amounts that may have been deposited into your bank account. When it comes to your tax refund in bankruptcy, it is imperative to discuss how to protect your funds, and any upcoming tax refunds, by making an appointment with a qualified Louisville bankruptcy attorney. Call us today to schedule your next appointment so that we can help you start off 2015 free from stress. We’re here to help you get the debt relief that you deserve!

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Call Louisville bankruptcy lawyer Tracy Hirsch at (502) 435-2593, and start the new year with peace of mind that you’re on a path to financial freedom.