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Tax refund with bankruptcy?

New Contributor

Tax refund with bankruptcy?

Hello Everyone,
So I am going to be filing a chapter 7 in the next few weeks and will be starting over. My question is what happens to my tax refund coming this next year? Will my creditors be able to seize the refund for any reason? I am expecting around $5000 in a refund, and didn't know how it works with filing and taxes coming up. Someone out there has to know the answer to this? Also, anyone had success with filing chapter 7 with payday loans outstanding? I have quite a few of them, and didn't know how they are able to get get these included in the chapter 7.


Thanks for all your help!

Message 1 of 3
Valued Contributor

Re: Tax refund with bankruptcy?

So, for taxes - here is what happened in our case.


Our attorney asked us if we were expecting a refund and if we were, the expected amount.  There is a place on your petition for this information.  Answer it honestly.  Our attorney said we had enough left in our "wildcard exemption" to cover our anticipated refund of $1500.00 and listed it as income.  When we went for our 341 meeting, we were asked if we were expecting a refund and if we disclosed that in our petition - we said yes - you're under oath, so, you have to be honest.


I don't believe this is a clear cut answer for this - as each BK case is dependent upon your personal circumstances.  Your attorney will advise, but there is a way for the trustee to take your refund and disburse it if he feels it to be necessary.


Now, for payday loans - yes you can include them and yes you can get them discharged.  Be sure to have some time from the last payday loan to your filing date (60-90 days) as to avoid any presumption of fraud.


Good luck!

BK Discharge 2/11/14

Currently in the garden.
Message 2 of 3
Moderator Emerita

Re: Tax refund with bankruptcy?

Yes, the trustee will take your tax refund if you do not expressly exempt it in your petition.


Here are a couple of links for you to review. Naturally your best answer will come from your Bk attorney, but these links should help you understand the process. First one is to find out what exemptions are allowed for your state and the second one addresses tax refunds:



Message 3 of 3
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