Can a creditor lay claim to my income tax refund if all the earnings are from exempt sources?

UPDATED: May 13, 2009

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: May 13, 2009Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can a creditor lay claim to my income tax refund if all the earnings are from exempt sources?

After receiving a citation to discover assets, the attorney for the credit card compamy asked to see my 2008 tax return where I will receive a refund. The refund is from a joint return filed with my husband whose income is also exempt. I will receive the refund before going back to court.

Asked on May 13, 2009 under Bankruptcy Law, Illinois


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

An asset is an asset is an asset.  Let's put it this way as I play devil's advocate: so why should you keep your tax return when the creditor is out money?  So, unless the return itself is covered by an exemption, your trustee gets it as an asset of the bankruptcy estate.  See below:

1. Who owns my tax refund?

Since your right to receive a tax refund accrues as the tax year passes, it's an asset of your estate. Unless it's covered by an exemption; therefore, your trustee is entitled to it.

(Reviewed 11.14.08)




IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption