Do I still have to file my income tax ?

If I file for bankruptcy, do I still have to file my income tax or does my attorney do that ? And, do I get to keep any money from my return?

One Comment

  1. Whether you can keep your tax return depends on a number of variables. I am assuming that you reside in NY area and in Buffalo or Rochester or surrounding areas. Down state is little different. If you are claiming the federal exemptions (depending on the amount of equity in your home and the amount of the return), you can keep your return by claiming it exempt under the federal “wildcard” exemption. If you claim the NYS exemptions, then the return has to go to the trustee for your creditors. However it is pro-rated. In other words, if you file your bankruptcy case on 6/1/2015, only 5 months of your return is subject to liquidation. From Jan. 1, 2015 to June 1, 2015. If the amount is under $1,500 ( and there are no other assets subject to liquidation) then the trustee usually will “abandon” the asset. Abandon means that trustee will not take your pro-rated return and allow you to keep it. You and not your attorney have to file your tax returns. If the trustee does ask you for a copy of your tax return, do not under any circumstances spend the money until the trustee reviews the matter and advises your attorney would amount, if any, he wants from your refund. This applies to only the year you will bankruptcy under a chapter 7. Subsequent returns are not part of your bankruptcy case and the trustee therefore has not interest in it.

Leave a Reply