If you are worried about losing your tax refund because of a bankruptcy, don’t worry about it. It is not necessary to surrender your tax refund even if you are filing for bankruptcy. Your tax refund may stay in tact as long as you do not exceed the exemption limit for cash in a bank account which can be up to $27,000 in most cases. Don’t be afraid to get your taxes filed and a refund sent to your bank account or a check sent to you. It is not always the case that you will get the refund taken from you in the instance of a bankruptcy. It is more likely for you to lose your tax refund if you have a judgment against you from a creditor law suit via bank account levy. A judgment against you in court by a creditor can initiate a wage garnishment or bank account levy if you don’t deal with the outstanding debt. A wage garnishment or bank account levy is assisted by the authorities to allow them to take money from your bank account or take a percentage of wages that is your hard earned money. A bankruptcy can also end wage garnishments and bank account levies if you already have one in place.
Check with your bankruptcy attorney to see if you meet the exemption limits to keep your tax return funds. Don’t take guesses at what you can keep and what you can’t keep in a bankruptcy. Many of our clients grossly underestimate what they can keep in cash assets through a bankruptcy. The best way to figure it out is through a free consultation with a bankruptcy attorney.
Bankruptcy Law Professionals offers free consultations for all of our clients. Bankruptcy Law Professionals is a bankruptcy law firm with offices in Orange County and Riverside/San Bernardino. We can be reached at (855) 257-7671 to set a phone or in-person consultation.