2013 Tax Refund Schedule File Bankruptcy by February 15th

File Your Chapter 7 Bankruptcy by April 2013 Tax Refund Schedule.  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 31st. For 2013 – The first date to receive refunds by is February 15th.  This is later some than some tax years because of the “Fiscal Cliff”.  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.

New Year’s Fresh Start Bankruptcy Timeline

New Year’s Fresh Start Bankruptcy Timeline

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NLO Nelson Law Office is a Debt Relief Agency offering debt relief through bankruptcy.

2012 New Year's Eve Fireworks Navy Pier Chicago, Illinois

2012 New Year’s Eve Fireworks Navy Pier Chicago, Illinois

1)  Get Through the Holiday, spend wisely and see our post about credit card use during the holidays
2)  File your taxes as soon as possible
3)  See a Bankruptcy Attorney about Debt Relief Options early in January to find out your options
4)  Receive your tax refund in February and file your bankruptcy.

Why is the New Year such a popular time to file bankruptcy?

Tax 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 filing fees is exempt.

Holiday spending often times puts people “over the top” after years of family budget deficits caused by medical bills, illness, loss of job or overspending.

What should I do if I don’t have much of a tax refund?

You can either wait to file your bankruptcy later after you have saved enough money to pay for it, or you can file a Chapter 13 bankruptcy which allows for all of your legal fee to be included in the bankruptcy “plan”.

Need more options?  Have Questions?

Call David Nelson at 877-464-6656 to set up a free bankruptcy consultation.

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tax refund bankruptcy exemption

tax refund bankruptcy exemption

We are just winding down the tax refund season here in June.  By now most people have filed their 2010 taxes and have gotten their refunds.  However, for the debtor who files their bankruptcy within 180 days of receiving the tax refund, the benefit of receiving a tax refund can be put in jeopardy.

Here’s how it works.  Say you receive a $6000 tax refund in April and use it to file a bankruptcy in May.  In June, the bankruptcy trustee will ask your attorney for information about how much your tax refund was and how it was spent.  So here’s how it goes:

Jane spent here tax refund on:

Bankruptcy Attorney $2200.00
Pay off loan from Mom:  $2000.00
Paid off Macy’s Charge Card:  $1800.00

Here’s what the trustee would say:  The amount of money spent by Jane on the bankruptcy attorney is exempt and cannot be seized by the trustee.  However, the loan to an “insider”  is not exempt.  Neither is the payment to Macy’s.  Bottom line, Jane is considered to have received $3800 in cash that is subject to the jurisdiction of the trustee.

Here’s the problem. Jane needs an exemption to keep this money.  So how does she do it?  Well…she can use the Illinois “Wildcard” exemption for $3800, but now she only has $200 left and still needs to exempt about $2000 of her furniture and other personal possessions.  Bottom line, in this case, Jane ends up “paying” the bankruptcy trustee $1800 because she doesn’t have enough exemptions to keep her tax refund.

What’s the morale of the story – tell your bankruptcy attorney how much you are expecting in tax refund, file your taxes promptly and provide a tax return copy to your attorney so that he or she can counsel you on how to spend or save your tax refund.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. CALL 877-GO-GO-NLO (877-464-6656) FOR A FREE BANKRUPTCY CONSULTATION TODAY! SATURDAY APPOINTMENTS ARE AVAILABLE.