Retaining a Tax Refund in a St. Louis Chapter 13 Bankruptcy
When an individual files a St. Louis Chapter 13 bankruptcy, he or she must be made aware of the tax consequences. Specifically, the St. Louis Chapter 13 Trustee will expect you to surrender any monies that you receive from a tax refund above $1,250.00. For instance, if you were to receive a tax refund (from the state and federal governments) in the amount of $3,000.00, the Trustee would expect you to turn over $1,750.00 to go towards your repayment plan. This would hold true for every year that you are in the Missouri Chapter 13.
ONLY $300 IN UPFRONT FEES FOR A ST. LOUIS CHAPTER 13
If you are a joint filing Chapter 13 with your spouse, then the amount of tax refund that may retain goes up to $1,500.00. As in the example above, the court will expect you to turn over any refund amount in excess of $1,500.00. So if for instance you are a husband and wife jointly filed St. Louis Chapter 13 bankruptcy, and you receive a tax refund of $3,000.00, then you would need to turn over $1,500.00.
In addition, you may also retain any monies that are related to Child Tax Credits or Earned Income Tax Credits. Depending on how large these itemized credits may be, you could very well retain more than the normal $1,250 (for an individual filer) or $1,500.00 (for a joint filer).
*** The court has also may it clear that starting for the tax year 2014, all individuals actively in a Chapter 13 must turn over their federal and state tax returns to the Trustee. Failure to do so will have certain consequences.
Although these excess tax refunds must be turned over to the Trustee, it is of course always within your power to make whatever deductions and/or exemptions you wish to make on your tax forms. The amount you receive in a refund each year is greatly dependent upon how many deductions/exemptions you claim. Our staff is ready to answer any and all of your questions, set you on a path towards financial success, and get you the fresh start / clean slate that you deserve.