We’re getting a really nice tax refund this
year, but the trustee wants all of it. That’s going to devastate my family. Can the trustee really do that? My name is Ron Drescher. I’m an attorney practicing bankruptcy and
creditor’s rights. Maryland, Delaware, Pennsylvania, and Virginia. And you know, that trustee has rights in your
tax refund. It’s horrible to consider that so many families
rely on that tax refund for so many important things; to fix the car or to go away on a
trip or to catch up on some other bills. That to lose that tax refund can be devastating,
but the trustee has the rights to take that refund, but only if it’s so large that it
exceeds the amount of exemptions that you’re allowed to keep in your case. Exemptions is the cash, property, and other
stuff that you have that you’re allowed to keep, even though you’re filing bankruptcy
and even though you’re not paying all of your creditors in full. And in most situations, you’ll have enough
room in your permitted exemptions to squeeze the tax refund into the exemptions, so you’ll
keep it. Or the better plan is to, if you know that
you’re maybe going to be filing bankruptcy this year, do your tax return early. Get your refund back early. Spend it on the things you need to spend it
on, then file the bankruptcy case, so that the trustee doesn’t have a tax refund. The trustee’s going to want to know what you
did with that money, but most people are honest and they’re doing the right thing, so you’re
probably not going to have a problem if you did spend down that tax refund before you
file bankruptcy. My name is Ron Drescher. I’m an attorney practicing bankruptcy and
creditor’s rights. If you have a question about what’s going
to happen to your tax refund in bankruptcy, please pick up the phone and call me. I would love to hear from you.