Expert: Terry Leeders - 6/12/2008

Question
I received $12,000 tax refund last April.  I had it in my checking account, but when I saw bankruptcy was unavoidable two months ago, I withdrew it and I have it stashed.  
Do I have to surrender it in a chapter 7 or chapter 13?  Can I put it in a retirement fund for myself, or in funds for my kids, hindering it exempt?  Are there ways to spend it that would save it?  Or is it unavoidable that I will lose it.
From Oregon - Julie

Answer
You have to disclose cash on hand, in the bank, under the mattress etc. in a bankruptcy case, no matter what chapter you file.  Each state has exemptions to protect assets, such as cash, so speak with a local bankruptcy attorney to find out how much can be protected.  If it cannot all be protected, your attorney will guide you on what you can and should spend the rest on.