Keeping your tax returns while filing for Chapter 7 Bankruptcy in Manhattan

Its coming close to tax time again (joy), and your trusty Chapter 7 Manhattan Bankruptcy Attorney has some inside help for you.  If you’re planning to file for Chapter 7 Bankruptcy in Manhattan now, be prepared for questions surrounding your tax returns.  I know that you’re thinking that you get your returns in April, and sometimes March, but many people file sooner, which means that the Trustees can ask about them much sooner.

In a Chapter 7 Bankruptcy in Brooklyn, Manhattan, or anywhere in New York City, the exemption (the amount you can keep) for tax returns is $2400 if you’re filing individually.  HOWEVER, that also includes the exemption for money you already have in your checking account, savings account, or in your pockets.  That means that if you’re receiving a tax return soon, you may be over the exemption limit and the Trustee may require you to fork over some moolah.  So…what to do?  You may want to hold off on filing until you receive your return, or you can look at what’s in your checking account at the time you’d like to file to make a determination as to whether you can keep that tax refund.  In any case, there are various solutions to effectively handle this issue.  Speak to your Brooklyn Bankruptcy Lawyer for more info about ways to save your hard earned returns.

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  • http://www.chapter13dayton.com/about-us/client-testimonials/ Fitzgerald Q. McAuliffe

    Great post. If you file a Chapter 7 case in Cincinnati then you need to plan your bankruptcy filing before the case goes to court. Cincinnati consumers may be able to exempt the refund in some situations. Others may need to purchase necessities or get medical work done; both can be properly explained and spent before filing.
    As to Chapter 13 cases in Cincinnati– bankruptcy cases that may last for 3-5 years – each year you need to submit your tax return to see if your income has gone up. Up enough for the trustee to require a change in your payment plan.
    Tax refunds received while in a Chapter 13 are considered disposable income in the eyes of the bankruptcy judges in Cincinnati. Those funds should be turned over to the creditors

    The trustees are very helpful when it comes to requests to keep your tax refund. But make sure you give me a copy of your tax return each year you are in chapter 13. It is hard for me to help you keep a tax refund when your income went up too much and I did not know.
    if you are paying your unsecured creditors in full in a Chapter 13, then you do not have to turnover your tax refunds.

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