The Bankruptcy Blog
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TAX REFUNDS
Saturday, January 05, 2008
We're coming up on tax season, which is a busy time of year for the bankruptcy business. If you are contemplating bankruptcy and receive a substantial tax refund, then you should contact an attorney about the use of the refund before you spend it. Often people pay back loans to friends and relatives with their tax refund money only to find out later that these payments can cause problems in their bankruptcy cases. There is a "lookback" period in bankruptcy that allows the bankruptcy trustee to go after such payments. As with most things in the bankruptcy process, it is better to get legal advice on the front end rather than dealing with the problems after the fact.