Monthly Archives: December 2015

How do I spend my 2015 tax refund before filing bankruptcy?

You spend it carefully and keep receipts.  But yes, you have to spend it all.  spend 2015

And yes, you’ll feel guilty suddenly having to go on a shopping trip right before you’re going bankrupt, but remember, this is your attorney advising you that you must convert your non-exempt item (cash from the tax refund) into exempt items (things that I can protect).

Just remember that if you file bk before you receive your refund, the trustee will take it.  So, we must wait to file until after you’ve received and spent it.

So what do you do?  Spend it.  (And keep your receipts.  The trustee will ask us to account for the refund money and tell him exactly what we did with it).

So let’s say you get your refund March 1, 2015.  What do you do?

Better said, what don’t you do:

1.  Don’t go buy a new toy like a dirt bike or a tv.

2.  Don’t pay off any friends or family.  This is a preferential transfer, to an insider no less, and it results in Mom and Dad being sued by the trustee.

So what do you do:

1.  Spend it on exempt items under Utah Law.  This basically means food, clothing, washer, dryer, fridge, freezer, stove.

(Did you see a computer on the list?  No.   Don’t ask me if that’s okay.  It’s not).

2.  And use the rest to pay me.  :)

So let’s say you spend the tax refund on food storage March 1st and keep all of your receipts.  When can you file?  March 2nd.

Here is a relevant portion of the

Utah Exemptions Act, Utah Code Title 78B Chapter 5, Section 505

An individual is entitlted to an exemption in …

(viii) (A) one:

(I) clothes washer and dryer;

(II) refrigerator;

(III) freezer;

(IV) stove;

(V) microwave oven; and

(VI) sewing machine;

(B) all carpets in use;

(C) provisions sufficient for 12 months actually provided for individual or family use;

(D) all wearing apparel of every individual and dependent, not including jewelry or furs; and

(E) all beds and bedding for every individual or dependent;

There are other items you can spend the money on, and this is by no means comprehensive, but this should give you a good idea on how to spend it.  If you have questions on what to use it for, ask your attorney;  that’s what he’s there for.

Will I lose my 2015 tax refund if I file bankruptcy first?

Yes.  It’s that time of year again where I have to answer the phone and tell people that I don’t want their money until February or later because of tax refund season.  It makes a lean December/January in our household, but it’s the only way to protect my clients.

I have discussed this issue a few time before and will post the links below, but basically, if you file bk before you receive and spend your tax refund, you will lose that refund.  That means that you need to wait for your bankruptcy until after you get your refund money back.  2015 refund

Does Utah law exempt my tax refund/EIC in bankruptcy?

What is a tax refund disposition in bankruptcy?

How do I spend my tax refund before I file bankruptcy?

Can I buy glasses with my tax refund (before filing bankruptcy)?

Can I use my tax refund to pay for bankruptcy?

Can I buy a laptop computer with my tax refund before bankruptcy?

Can I use my tax refund to pay my parents back (before filing bankruptcy)?

Is there a chance that a creditor will garnish/levy my tax refund?

How can I find out how much my tax refund will be next year?

Should I file bankruptcy now to stop the garnishment, or wait for my tax refund?

Is there a way to look up my bankruptcy case without using PACER or calling an attorney?

There is now.

Attorneys use PACER, which is the U.S. Government’s website to provide Public Access to Court Electronic Records.  It is a fee based service (we have to pay when we run searches), but it provides us .pdf copies of any court document filed in a case.

In the old days (less than a year ago), if a client needed information on his bankruptcy case, he’d have to call his attorney and ask the attorney to run a search.  However, most people have learned that attorneys are often in court and cannot answer immediately.

Recently, the Utah Bankruptcy Court has been offering something called a Simple Case Lookup, where  you can look up a Utah bankruptcy case if you have either:

  1.  the case number
  2. the name and social security number
  3. or the business name.

I tried it out today, and it doesn’t give much info, but it’s still in the beta phase of testing.  If you look at the attached image, it will at least tell you when the case was filed, who the judge/trustee is, and what meetings and deadlines are coming up.simple case lookup

It’s a start, but for now, if you really need more information than that, you’re still stuck calling the court clerks at 801-524-6687 (and yes, they actually answer and know more bankruptcy law than most attorneys) or call your bankruptcy attorney and have him run a search on PACER.