You lose it, except you spend it first. However you received’t lose these pandemic reduction tax monies (see beneath).
Some states will provide you with an exemption to guard your tax refund monies. Utah will not be one among them. Actually, in most states, it’s important to use it or lose it. For those who’re uncertain, name a bk legal professional in your state and discover out.
I’ve written a couple of articles on this, and the hyperlinks are beneath.
Whenever you file chapter, it’s the bk trustee’s job to find property that you’ve got. Particularly, he needs to search out property that may be bought off and used to pay your collectors. Usually, the trustee will take a look at fairness in your house, cash in your checking account, the worth of you automobile, and any tax refund monies that you’ve got NOT obtained but.
Which means it’s important to obtain and spend your tax refund earlier than you file chapter, or there’s a good probability that the bk trustee will intercept it and use it to pay your collectors.
Right here, I’ll attempt to provide you with a fast and soiled listing of the do’s and don’ts of spending your tax refund monies.
Don’t:
- repay Mother and Dad earlier than you file bk
- purchase a brand new toy, like a dirtbike
- disguise the cash and declare that you just spent it
- purchase jewellery
- prepay lease
Do:
- purchase meals storage and clothes
- purchase boring family home equipment like washer/dryer/fridge/freezer/range/stitching machine
- purchase weapons (actually) (I can defend as much as 3 of any worth)
- pay for car repairs and tires
- pay your legal professional in your chapter
Pandemic stimulus tax funds and tax credit.
For those who haven’t obtained these but, don’t fear. These are exempt from collectors, together with the chapter trustee.
Listed below are the previous weblog articles:
Spend it earlier than you go bankrupt!
Utah has NO exemptions to guard your tax refund if you file chapter. Which means when you go bankrupt earlier than you obtain and spend your tax refund, you’ll lose it. The chapter 7 trustee will take your refund and use it to pay your collectors. Alternatively, when you wait just a bit bit to file and obtain your refund, you possibly can spend all of it earlier than submitting chapter.
Simply bear in mind to spend it on exempt gadgets.
You possibly can undoubtedly use it to pay your chapter legal professional to arrange your case.
Don’t repay mates or household! Name me when you’ve got any questions on methods to spend it. You possibly can even textual content me on a Saturday at midday as you’re standing in an RC Willey attempting to resolve if you should buy the brand new $800 bunk mattress set for the twins (sure, you possibly can). You possibly can textual content me at 801-787-8860.
The listing is beneath, however you’re at all times secure with meals storage, clothes, washer, dryer, fridge, freezer, range.
Here’s a rehash of my submit on this similar subject final yr (and the yr earlier than):
What occurs to my 2018 tax refund if I file chapter in 2019?
What occurs to my 2017 tax refund if I file chapter in 2018?
What occurs to my 2016 tax refund after I file chapter?
It’s that point of yr once more the place I’ve to reply the telephone and inform people who I don’t need their cash till February or later due to tax refund season. It makes a lean December/January in our family, but it surely’s the one solution to defend my purchasers.
(I’m slicing and pasting from earlier posts, so please forgive the repeat data).
So let’s say you get your refund February 1, 2016. What do you do?
Higher stated, what don’t you do:
1. Don’t go purchase a brand new toy like a mud bike or a television.
2. Don’t repay any mates or household. It is a preferential switch, to an insider no much less, and it leads to Mother and Dad being sued by the trustee.
So what do you do:
1. Spend it on exempt gadgets beneath Utah Legislation. This mainly means meals, clothes, washer, dryer, fridge, freezer, range.
(Did you see a pc on the listing? No. Don’t ask me if that’s okay. It’s not).
2. And use the remainder to pay me.
So let’s say you spend the tax refund on meals storage March 1st and hold your whole receipts. When are you able to file? March 2nd.
Here’s a related portion of the
Utah Exemptions Act, Utah Code Title 78B Chapter 5, Part 505https://le.utah.gov/xcode/Title78B/Chapter5/78B-5-S505.html
A person is entitlted to an exemption in …
(viii) (A) one:
(I) garments washer and dryer;
(II) fridge;
(III) freezer;
(IV) range;
(V) microwave oven; and
(VI) stitching machine;
(B) all carpets in use;
(C) provisions adequate for 12 months truly offered for particular person or household use;
(D) all carrying attire of each particular person and dependent, not together with jewellery or furs; and
(E) all beds and bedding for each particular person or dependent;
There are different gadgets you possibly can spend the cash on, and that is not at all complete, however this could provide you with a good suggestion on methods to spend it. If in case you have questions on what to make use of it for, ask your legal professional; that’s what he’s there for.
