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Bankruptcy and Tax Refunds and the Secret Bankruptcy Exemption: The Video

By Joseph McDaniel, Esq.

At this time of year, people may be getting a tax refund, which is a good thing if you owe a lot of debt.

On the other hand, if you owe a lot of debt, you may be considering filing a bankruptcy sometime soon.

When you contemplate a bankruptcy filing, a lot of questions may well pass through your mind, including what do I get to keep, and what debts will be discharged, and how do I fill out the bankruptcy forms, and what happens at a first meeting of creditors?

Many people forget this question: what happens to my tax refund if I have not received it and spent it on food and mortgage or rent and medicine and legal fees prior to filing my bankruptcy?

In this little educational bankruptcy video, I talk about that, and I also make reference to the "secret bankruptcy exemption", which is almost like a mini-wild-card exemption in Arizona; the secret is simple economics.

It costs a bankruptcy trustee something to administer a case, and if the total amount of non-exempt assets in the case appears to be less than about eight hundred or a thousand dollars, there's a good chance that the trustee will stamp the file "no asset", and move on to the next.

Here's the video:

Full post as published by Arizona Bankruptcy Attorney Blog on March 08, 2011 (boomark / email).