Saturday, March 9, 2013

Filing Chapter 7, and Tax Returns

Did you know that it’s best to wait to file Chapter 7 bankruptcy until you file your taxes?   We tell our clients to file your tax refund, and spend it on necessary expenses.  Why is this a good idea?  Depending upon when you file, the bankruptcy trustee is going to take some or all of your tax refund to pay your creditors.  Spending your tax return before filing Chapter 7 bankruptcy is recommended, However remember that you need to be cautious as to where your tax refund is spent.  So where do you spend your tax refund?  Your tax refund should be spent on necessary expenses prior to filing.  Necessary items may include groceries, utility bills, mortgage or rent, and bankruptcy attorneys’ fees.  Stay tuned more to come….