Missouri | Bankruptcy
Legal Question
Is it better to file for bankruptcy before or after I file my taxes?
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Legal Answer
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Read More Answered By: Alicia Beeler Villines |
This is a really, really, important topic.
If you are expecting a tax refund, file your taxes just as soon as you can. File your bankruptcy as soon as you have received and spent your refund on consumables (like groceries) and exempt property.
BUT don't wait until you've done all this to start preparing your bankruptcy. Preparing a bankruptcy petition can take some time, and then you may be looking at the possibility of having to cough up part of next year's refund to the trustee.
This is because the portion of refund attributable to pre-petition earnings is considered part of the bankruptcy estate. In English, if you file on, say, the 208th day of 2012, then 208/365 of your refund for 2012 can be taken by the trustee. If your refund is $3,000, then the trustee takes about $1710. Ouch!!
If you are considering filing in 2012, I urge you to confer with a local bankruptcy attorney as soon as possible (like yesterday!). Many people hesitate because of the perceived expense, but many give free consultations, and not getting advice early on can wind up costing you more than if you had simply hired the attorney in the first place. |
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