Timothy J. Sierra, Attorney at Law Trusted Florida Bankruptcy Attorney Since 1987
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TAX REFUND AND BANKRUPTCY

If you are contemplating filing for bankruptcy relief the last or first quarter of the year, beware. The chapter 7 trustee will be looking to take your tax refund.

For chapter 7 filers, if your case is filed in the fourth quarter of a calendar year or any time before you receive your refund, you may be required to turn over a portion of a tax refund you may receive. Your bankruptcy estate includes a tax refund earned up to the date of filing of your bankruptcy petition. Even if you have not filed your return, if you are entitled to a refund on the date of filing, the entitlement and right to the funds belongs to the trustee.  Florida Law protects the portion of a tax refund awarded for earned income credit and would not have to be turned over to the trustee.

The best strategy is to file a bankruptcy petition after you receive your tax refund and after you spend the refund. The refund should be spent on reasonable and necessary expenses, such as payment of real estate taxes or homeowners insurance, non cosmetic medical needs, household repairs and upkeep, even payment of your bankruptcy attorney's fees and costs. It should not be used to pay any creditors, including family members, as you could be creating a preference. Always consult with your bankruptcy attorney before spending the money to make sure you are not creating more problems.

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  • "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. "
  • "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. "
  • "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. "
  • "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. "
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Fax: 813-258-4746
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