Timothy J. Sierra, Attorney at Law Trusted Florida Bankruptcy Attorney Since 1987
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TAX REFUNDS

Beware, now is the time that chapter 7 trustees will inquire about tax refunds for 2013. If you file a bankruptcy petition in the fourth quarter of any given year, most trustees will keep your case open to recover a tax refund. Most debtors are not aware that they are in jeopardy of losing a tax refund because they mistakenly believe that if they do not have it, the trustee cannot take it. Tax refunds are an asset of a bankruptcy case even though a debtor may receive it in the future. The amount of a tax refund that belongs to a bankruptcy estate depends upon when a petition is filed. For instance, if a debtor files a case on the 182 day of the year, the bankruptcy estate has a 50% interest in a tax refund. If the debtor receives a tax refund of $5,000.00, $2,500.00 would belong to the bankruptcy estate.

Trustees generally do not keep open cases filed in the middle of the year in order to recover a tax refund, but they do for cases filed in the fourth quarter of any given year. There are a couple of things debtors can do to avoid losing a tax refund. One, they can adjust their withholdings for the remainder of the year to minimize the amount of a refund. Second, a debtor can wait to file their petition until they receive the refund so it does not become part of the estate. Tax refunds may also be claimed as exempt if there is room to claim the refund under a debtor's personal property exemption. If a debtor's refund is attributable to earned income credits, then the amount of the refund for earned income credit is not part of the bankruptcy estate.

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  • "When I first came to the decision to file for bankruptcy, I had no idea where to start. I began researching attorneys on the internet and came across the information for Tim Sierra. Since he specialized in bankruptcy and had a lot of experience......"
  • The process of going through bankruptcy could be very overwhelming but Tim made me feel at ease and I felt that my needs were being taken care of. I truly feel that he had my best interests in mind and the lines of communication were always open....
  • "I had to file a Chapter 7 bankruptcy. I didn't know anyone who could refer someone so I took a chance and just looked on the Internet. I don't remember exactly why I chose Mr. Sierra, but I am glad I did..."
  • He was honest, straightforward, and hard-working. In my case I ended up with some extenuating circumstances and he handled the matter professionally even though I'm sure the work probably exceeded what he originally felt it would be....
  • I don't ever write reviews, and I had no prior relationship with Mr. Sierra. This review is simply being written as a service to others that Mr. Sierra is an excellent attorney and should be considered for your needs if you need one....
  • "I'm very happy to have been referred to Tim for my Chapter 7 filing. He was knowledgeable in his field and very responsive in replying to any questions or concerns I had. Tim was also very accommodating with meeting times..."
  • " I recently was in need of Mr. Sierra's services and I found him to be very understanding and helpful in my particular circumstance. He met with me and explained everything in full detail and also answered every question that I had....."
  • " I recommend Timothy Sierra a loyal and dependable lawyer. When you talk to him you feel that you are with a friend or a member of your family. Timothy is able to lead you in every step of the process. Good job Timothy."
  • " Bankruptcy is a private and personally devastating life event. Timothy Sierra and his assistant, Nancy, made the process as painless as possible. They kept in close contact via phone and email so I always knew what was happening in my case...."
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