If I File Bankruptcy, What Happens To My Income Tax Refund?
If you file a Chapter 7 Bankruptcy petition, the Trustee may take a portion of the Income Tax refund that you will receive next year. There is an advantage to filing Chapter 7 Bankruptcy in the Spring, after you have received (and spent) your tax refund for the previous year, because the trustee prorates his share of your next year’s refund to your date of filing, so early filing is better.
We are a debt relief agency. We help people file for Bankruptcy under the Bankruptcy Code.