Tax Refunds and Bankruptcy
Often times debtors file bankruptcy and have received or are expecting to receive tax refunds from the previous tax return. In chapter 7 and chapter 13 cases, these refunds are considered property of the estate.
It may be forfeited to the bankruptcy Trustee unless there are exemptions available to protect it. If a debtor is in chapter 13, they are more than likely going to have to surrender the refund every year they are in the bankruptcy unless you can show a hardhsip for why you need it. The refund is considered additional income and does not satisfy that month's plan payment requirement.
If you have already spent the refund, the debtor may become indebted to the bankruptcy court for the amount of the refund and may have to pay back the court over a period of time.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
