Tax Refunds and Bankruptcy

Can You Keep Your Tax Refund in a Bankruptcy?

The short answer to that is maybe. All assets are exempt up to a certain amount in a bankruptcy. The exemption amounts are set by state statute. In Ohio your tax refund asset would be claimed under the exemption of cash or you could also use a wildcard exemption. Currently those exemptions in Ohio are $850.00 and $2,300.00 respectively. However, there’s more to it than that. There may be other cash that you need to protect or claim exempt, such as cash on hand or cash in your checkings or savings account if you carry a substantial balance from month to month. Additionally, you may have another asset that you wish to protect that has equity exceeding the allowable exemption for that item that you wish to apply the wildcard exemption to. Some additional considerations are whether or not you filed your taxes and recevied your refund prior to filing bankruptcy and if so how those funds were spent and also whether any portion of your tax refund was or is anticipated to be from child tax credit.

If you need to file bankruptcy and expect to receive a refund in excess of $2,000.00 contact Dailey Law Offices today to talk to one of our experienced bankruptcy attorneys and learn whether or not you may keep your tax refund.

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