It is the time of year when you are waiting for your tax refund. The big question is what will I use if for?
If you are in debt and you use it to make minimal payments without resolving your debt then you are not using your money wisely. However, if you use the refund to totally get caught up on your mortgage or auto payment then you are using the money wisely, since you always want to get current on secured debt.
If you have substantial credit card debt or have arrears on your mortgage or car payments, the tax refund can help protect your assets and get a fresh start, since you can use it to file bankruptcy.
When you file bankruptcy, the tax refund is usually an exempt or protected asset so it cannot be seized by creditors. Only in limited cases may a Chapter 7 trustee be able to seize the tax refund. But if you have so many assets you will usually do a Chapter 13 anyway, where the refund won’t be touched.
Thus, don’t waste your money and throw it away on unsecured credit card debt when you can protect the tax refund from creditors. Use the refund to clean the slate and get a fresh start in Chapter 7, or restructure your debt in Chapter 13.
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 32 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.
We are more than happy to discuss all your options and to see if bankruptcy is the best option for you.