Bankruptcy

Tax Rebate

By Jonathan Alper

Most people who are considering bankruptcy will soon receive the economic stimulus tax rebate recently passed by Congress and signed by President Bush. Someone asked me today whether a bankruptcy trustee will try to seize the refund as part of the bankruptcy estate. Normal tax refunds are part of the bankruptcy estate, and debtors must turn over future tax refunds to the bankruptcy trustee. The bankrutpcy trustees have not taken a position on this issue. However, the last time the government gave a special money distribution to jump start the economy the bankruptcy trustees adopted the policy of not asserting any claim to the money on the theory that the money was not a refund of the debtor's pre-filing assets. I expect that this year's stimulus payment will remain debtors' property.

Full post as published by Florida Bankruptcy Law on February 14, 2008 (boomark / email).