What Happens to My Tax Refund During Chapter 13 Bankruptcy?
Need an Affordable Chapter 13 Lawyer in McKinney? Call (214) 282-5024 to learn how to Navigate Chapter 13 bankruptcy in McKinney Texas. Navigating Chapter 13 can be complex, especially when it comes to understanding what happens to your tax refund. The treatment of tax refunds under Chapter 13 bankruptcy varies depending on where your case is filed. Each court has specific local rules or general orders that govern these situations.
For example, in the Eastern District of Texas, the Chapter 13 Trustee provides guidance and support to debtors regarding their tax refunds. Understanding these local differences is crucial for effectively managing your bankruptcy case.
Consult with your McKinney TX Chapter 13 bankruptcy attorney to get precise information tailored to your specific filing location and situation. This will ensure you’re fully informed about how your tax refund will be handled during your Chapter 13 bankruptcy.
In the Eastern District of Texas, the Chapter 13 Trustee permits a debtor to retain a tax refund of $2,000 or less. If the refund exceeds $2,000, the Trustee will seize the entire amount and allocate it to the general unsecured creditors in the bankruptcy case. Conversely, in the Northern District of Texas, the Chapter 13 Trustee allows the debtor to keep the first $2,000 of their tax refund, with any additional amount going to the general unsecured creditors. However, in both districts, if the debtor has outstanding back taxes, the IRS may choose to offset a pre-petition refund, applying it towards the back taxes owed to the Internal Revenue Service.
These regulations regarding tax refunds illustrate how bankruptcy cases can vary for debtors based on their geographic location. It is crucial to consult with a local bankruptcy attorney who has experience with cases in the specific district where you intend to file before proceeding with bankruptcy.
Areas of Practice
- Consumer Bankruptcy: Chapter 7 and Chapter 13
We help individuals in Texas navigate the bankruptcy process to achieve financial relief. Our services include Chapter 7 filings for liquidation of assets and Chapter 13 filings for debt repayment plans. - Probate: Wills and Power of Attorney
Our probate attorneys in Texas assist families with the legal process after a loved one passes away. This includes will preparation, administration of estates, and power of attorney drafting. - School Law
We provide legal counsel on matters related to school law in Texas. - Personal Injury
If you have been injured due to someone else’s negligence, our personal injury lawyers in Texas can help you fight for the compensation you deserve.
