Can I keep my taxes refund after filing for Chapter 7 Bankruptcy?

Yes, you can keep your taxes refunds after filing for Chapter 7 Bankruptcy in Virginia. In general, when filing for Chapter 7 bankruptcy, a debtor can exempt or keep some of their assets. Depending on the state, there are “exemptions” or laws on what a person can exempt or keep, such as jewelry, home furniture, and other personal property. In Virginia, one exemption is the “wildcard exemption” which a debtor can choose to protect federal income tax refunds or credits in the amount of $1,000. Thus, a person can generally keep up to $1,000 of their tax refund when filing for Chapter 7 bankruptcy. Even if the wildcard exemption does not apply, tax refunds are also exempt from creditors if they are from tax years prior to filing for bankruptcy. However, future refunds from taxes earned after filing for bankruptcy are not exempt and will be used to pay off creditors. It is important to consult with a bankruptcy attorney to understand specific Chapter 7 laws in Virginia and how they apply to you.

Related FAQs

Can I keep my taxes refund after filing for Chapter 7 Bankruptcy?

Related FAQs

Related Blog Posts