Does a stay prevent my tax refund from being taken even if I owe taxes?

I have an outstanding unemployment debt and tax debt, but I am relocating to another state and need that money for my expenses to move. Will they take them or not?

Asked on March 7, 2012 under Bankruptcy Law, Connecticut


Alicia Beeler Villines / Law Office of Alicia Beeler Villines

Answered 8 years ago | Contributor

The two things you can count on are death and taxes.  While it's possible that your refund will spend some time in a sort of financial limbo, in the end your refund will go to the governement.  You don't give much detail about your "unemployment debt" (were you an employer?  did you receive an overpayment of benefits?) but not all debts can be discharged in bankruptcy.  Among these are debts for taxes and certain other debts owed to the government.  If you owe one of these "Priority Debts" your best bet is to negotiate a payment schedule with the creditor agency BEFORE you file your bankruptcy.  The payment(s) should appear both on your Means Test and your Schedule J (expenses).

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