If I drive a truck and get back around.a $5,000 income tax refund each year, since I filed for Chapter 13, do get to keep my refund or does the Trustee take it?

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If I drive a truck and get back around.a $5,000 income tax refund each year, since I filed for Chapter 13, do get to keep my refund or does the Trustee take it?

I use it to pay property taxes and other bills and try to save some just in case. Since i drive a truck my income varies week to week and sometimes I don’t get a check with my plan payment taken out.

Asked on January 26, 2013 under Bankruptcy Law, Pennsylvania

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

An expected income tax refund is property of the bankruptcy estate. Many debtors are able to protect all or a portion of their income tax refunds by applying legal exemptions to the expected refund. If you cannot protect your tax refund with exemptions, you are required to pay the non-exempt amount in your monthly plan payments. This is because your unsecured creditors would get this money if you filed a Chapter 7 bankruptcy.  I urge you to speak with an attorney about this. THere may be ways to save it.  Good luck.


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