Tax season is upon us, and, although it comes with some stress, it also comes with anticipation of receiving a tax refund. While many people may have plans regarding what they will do with their refund amounts, those individuals who are considering bankruptcy or who are currently in an active bankruptcy proceeding need to refrain from spending any tax refunds they receive from the government, because they may not be able to retain their refund amounts.
Can I Retain My Refund?
Whether you have filed or plan to file a Chapter 7 or a Chapter 13 bankruptcy petition, it is imperative that you consult with an attorney about the possibility of keeping your tax refund. It is important to understand that for those involved in a bankruptcy, retaining your refund amount is never a guarantee, and the outcome on this particular issue may be different in each case. A number of factors are considered in determining if a petitioner can keep his or her refund or if the funds must be given to the trustee.