Tax Refunds in Chapter 13
By L. Jed Berliner, Massachusetts Bankruptcy Attorney on Sep 28, 2008 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy, Massachusetts
Post-filing earnings, minus reasonable living expenses, in Chapter 13 is property belonging to the creditors. This can include tax refunds.
I used to counsel my clients to decrease their withholdings, which increases net pay and reduces the tax refund. I came to realize that, by and large, my clients needed the forced savings which a tax refund provides as the only way to be able to pay for serious home or car repairs. The day-to-day demands of living on limited income was just too great to allow for savings any other way.
I’ve been successful with trustees so far with allocating 1/12 of the expected tax refund as monthly income on Schedule I, and having my clients reasonably estimate the monthly portion of all their expenses on Schedule J - including an estimate for expenses based on how the tax refunds have been spent in the past.
It sure beats not fixing a busted car or leaky roof.
If you liked that post, then try these...
Legal Malpractice Claim is Property of the Bankruptcy Estate, Not the Debtor by Craig Andresen, Attorney at Law
Favorable Ruling For Debtors In Jones v. Wells Fargo Bank Upheld by Kevin Gipson, New Orleans Bankruptcy Attorney
Can An Individual File Chapter 11 Bankruptcy? by Kent Anderson, Oregon Bankruptcy Attorney




Sorry, comments for this entry are closed at this time.