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Should You File Bankruptcy Now Or Wait For Your Tax Refund?

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Video Transcript

Hello, this is Richard Shea with Sawin & Shea. We received an email question today regarding, should I file my bankruptcy now or should I wait for my tax refund? Well, that primarily is a fundamental question we receive this time of year. If at all possible, it’s something you wish to wait and file your tax return first so we can advise you how to spend it and then file your bankruptcy. Now, usually speaking that’s if you have the luxury to wait. If you don’t have a pending garnishment or a lawsuit or repossession or foreclosure pending, waiting on a tax refund, for that to arrive, not only can you use it to pay your attorney fees to file a bankruptcy, but also you can use that money so it’s not seized by the bankruptcy estate in either a Chapter 7, where the trustee would actually take those funds, or in a Chapter 13 where you may end up having to repay more of your debts to keep that tax refund.

As far as tax refunds go, the only portion of a refund that can be deemed exempt or protected is that attributable to earned income tax credit. Earned income tax credit is different from child tax credit. Earned income tax credit if what you would call a welfare benefit so therefore that is an exempt asset. But, the short and sweet simple of it is, if you can wait to receive your refund by all means do so. If you cannot, well, there’s ways to plan around it and to make sure you get the maximum benefit, make sure you call a bankruptcy attorney like ourselves that can walk you through that process.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

Are you carrying debt from an abusive relationship and do not know what to do? The Indiana bankruptcy attorneys at Sawin & Shea can help determine the options available to you. Bankruptcy can be the best way to free you from debilitating debt. With years of experience representing good people in bad financial situations, we can answer all your questions. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

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