Tax refunds and bankruptcy

I have received several emails from clients filing for Chapter 7 that are concerned about their tax refunds, and whether the chapter 7 bankruptcy trustee will want to take it or not.

While the tax refund is an asset, you should schedule the estimated amount in the case.
Your lawyer will then exempt what they can to protect as much as possible.
In Illinois, you have a $4000 wildcard per debtor to use towards cash, bank accounts, personal household goods and tax refunds. Your Illinois bankruptcy attorney can also exempt the portion attributed to Earned Income Credit.

You will need to file your taxes as soon as possible to work with your lawyer so they can best advise you when is the best time to file your case as well.

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Terrance Leeders

Chicago Bankruptcy Attorney, husband, father, Cubs fan.

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