Many people who file for bankruptcy in Okeechobee want to know if they will lose their tax refunds. The answer depends on the circumstances of each case. While some individuals who file for Chapter 7 or Chapter 13 bankruptcy will be able to keep their tax refund, others will have to forfeit it. Below we provide some information on what determines if you can keep your tax refund in bankruptcy.
In both Chapter 7 and Chapter 13 bankruptcy, a tax refund is seen as an asset. It does not matter if you already received your tax refund for that year or if you expect to receive it at a later date; the tax refund is still an asset. You will be expected to disclose in your bankruptcy documents whether you have received your tax refund or if you expect to receive one.
Tax refunds are the number one asset that trustees routinely take from individuals who file for bankruptcy. This is because tax refunds are checks that can go towards paying off some of your debt.
However, there are ways to protect your tax refunds. In Florida, exemption laws allow you to protect cash and certain assets. For some, this includes your tax refund. The best thing you can do is speak with an Okeechobee bankruptcy attorney about your options.