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 Posted: Tue Feb 20, 2007 9:20 am Subject: Anyone know about tax refund filed in bankruptcy? |
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Anyone know if you can file bankruptcy on a tax refund anticiaption loan? My sister ran into some trouble and got on eof these and now needs to file bankruptcy and i didnt know the details.
Any help would be greatly appreciated.
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KSpenneberg
Joined: 06 Oct 2006
Posts: 27
Debtcc Points: 1134
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| Posted: Tue Feb 20, 2007 11:51 am Subject: |
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If you go for chapter 7 bankruptcy, the tax returns are discharged and if you consider chapter 13, a repayment plan will be fixed for you. Under the new bankruptcy laws, not all tax debts are dischargeable.
The tax debts are dischargeable in chapter 7 and 13 bankruptcies, provided they meet the following criteria. The bankruptcy petitioner will evaluate your tax debts under the following conditions.
- The due date of filing tax return should be at least somewhere more than three years.
- You should have filed the tax return at least two years ago.
- The date of assessment should be 240 days old.
- Your tax return should be no way fraudulent
- And you should not be proven guilty of tax evasion.
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BuildingWealth
Debt Samaritan
Joined: 30 Jun 2006
Posts: 500
Debtcc Points: 4962
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| Posted: Tue Feb 20, 2007 7:41 pm Subject: |
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The RAL generally uses the tax refund itself as security for the loan (just like a car-note uses the car as collateral).
Your sister can include the RAL in a bankruptcy filing; however she shouldn't expect to get her refund back. Kind of like "you don't get a free car by going bankrupt on your carnote" ... the tax preparer has a security interest in the refund and will be able to keep it if she doesn't reaffirm.
Also keep in mind that you cannot discharge a debt incurred within 90 days of the bankruptcy filing.
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DebtCruncher
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