Expert: Terry Leeders - 3/27/2007

Question
I am getting ready to file chapter 7 and have already received my tax return back in February.  I receive the EIC and child tax credit.  Do I have to turn all of my refund in?

I have also lost my car to the bank, is there a total amount for assets that I can have, so not to have to sell anything?  Such as an amount I could you out of my refund to buy a car?

Answer
Under the current bankruptcy law, you must submit the tax return to the trustee.  As for the refund, you may be able to exempt all or a portion of that amount with the available exemptions allowed for bankruptcy in Illinois.  However, this depends on how much you expect to get back.  You should contact a bankruptcy attorney directly to help advise you on how best to protect your refund.

In Illinois there is a $2400 vehicle exemption for bankruptcy.  Your attorney can also guide you on getting another car so that it will be protected from liquidation.  It would also depend on if you have any other vehicles.

Should you wish to set up a free consultation, feel free to contact me. Thanks!
Terry