How Do I Protect My Income Tax Refund?

Whether you have received your 2010 tax refund or not, you earned it last year. Because of that, the bankruptcy court considers it an asset even if you haven’t seen your check yet. With some simple planning, clients can avoid turning those funds over to the trustee. Meet with an experienced bankruptcy attorney to discuss some of the following do’s and don’ts:

DO NOT SPEND YOUR INCOME TAX REFUND ON:
1. Presents for your friends or family members
2. Credit Card Bills
3. Luxury items such as electronics or vacations
4. Paying back friends or family members
5. Gambling at Harrah’s!!
INSTEAD, CONSIDER SPENDING THE INCOME TAX REFUND ON:
1. Your living expenses including your housing payment, car payment, groceries (maybe restock pantry?)
2. Home repairs or needed items which have been put off (new mattress?)
3. Non-dischargeable income tax debt
4. Dental work, medications, anything else health-related
5. Car Repairs

Of course, these types of purchases are best made BEFORE you file a bankruptcy case. Getting good advice from an experienced professional is critical to making the most out of the relief you are entitled to. If you are in Western North Carolina, I would be pleased to meet with you during a free, initial consultation.