St. Louis Bankruptcy Lawyers Blog
ONLY $675 ATTORNEY FEES FOR A ST LOUIS CHAPTER 7
There is a possibility that a portion of your tax refund could go to the Bankruptcy Trustee so that he/she can use it pay towards your unsecured creditors. But the goal of a good St Louis bankruptcy lawyer would be to try and protect those funds. Below is a description of how it works:
Whether or not you have to turn over your tax refunds depends on a couple of things: 1) what chapter of bankruptcy you file; and 2) whether or not you have available exemptions to cover the funds.
When you file a St Louis Chapter 7, the Trustee will treat a tax refund just like any other asset. So if you are due a large refund after you file your tax returns, the Trustee might demand that you turn it over. But there are definitely ways that this outcome can be avoided. For instance, if you take care of your taxes first, get your refund, spend it, and then file for bankruptcy, there’s obviously nothing for the Trustee to take. On the other hand if you can’t wait that long (because you need to file bankruptcy right away), then your attorney can use certain exemptions to protect the funds.
Let’s look at a specific example: You are a household of four (you, your spouse, and two minor children). You are anticipating a tax refund (combined federal and state) of $3,000. If you file a St Louis bankruptcy before you receive the refund, then your lawyer can use the following Missouri state exemptions to protect it: $1,200 Wild Card; $1,250 Head of Household; $350 per child. By making use of these exemptions, your tax refund would stay with you (and would therefore not be taken by the Trustee).
ONLY $300 UPFRONT ATTORNEY FEES FOR A ST LOUIS CHAPTER 13
The other option in the world of bankruptcy would be a St Louis Chapter 13. The rules are bit different in this chapter of bankruptcy when it comes to tax refunds. A Chapter 13 lasts between three (3) and five (5) years. During that period of time, you receive a tax refund, the following rules apply: If you file by yourself, you can keep $1,250 of the combined federal and state refund; you may also keep any funds that are associated with the Earned Income Tax Credit and the additional portion of the Child Tax Credit. If you file a Ch13 jointly with your spouse, you may keep $1,500; and the Earned Income Tax Credit and the additional portion of the Child Tax Credit.
But the best way to fully understand what your rights and options may be is to speak with an experienced St Louis bankruptcy lawyer!! We can answer all your questions, explain how the process works, and give you the best legal and financial advice possible.
The affordable St. Louis bankruptcy attorneys at The Bankruptcy Company have been saving and protecting people’s assets for years. Our goal is to make sure that you keep the assets and property you want, discharge the debts that you want to get rid of, and do it all at an affordable cost to you. All phone conversations and office consultations are free of charge.