This is the time of year when a majority of Chapter 7 Bankruptcy Cases are filed. Why? The primary reason is that tax refund are generally delivered before May 31, 2012. Tax Refunds can be used for the payment of attorney fees and court costs. In Chapter 7 Type Bankruptcy all attorney fees and court costs must be paid prior to filing. Therefore, tax refund season is usually one of the only times during the year when most filers have a lump sum to pay their bankruptcy filing fees.
Timeline: Most tax refund filers should go see a bankruptcy attorney in January and/or February to determine if they qualify for bankruptcy and whether it is a good form of debt relief. Most tax refund filers will file their taxes in February and receive their refund by April. Your bankruptcy attorney will have your bankruptcy petition ready to go once your receive your refund and pay your fees.
For those who will not receive a refund or have a refund that is inadequate to pay all of your prepaid attorney fees, a Chapter 13 bankruptcy is a good option. In this type of bankruptcy typically the court fees are paid up front the attorney fees are paid through the plan. This is great for people facing garnishment, foreclosure or emergency situations that do not allow for time to make payments to get fees together for a Chapter 7 Bankruptcy.
NLO Nelson Law Office is a debt relief agency offering debt relief through bankruptcy.
[...] Refunds are usually received prior to May 31st of the New Year. Tax Refunds can be used for legal fees and court costs in a bankruptcy. The tax refund is listed on the bankruptcy petition, but the portion used for legal fees and [...]