Tax time has come again and many Seattle and Tacoma area bankruptcy filers are wondering whether they are going to be able to eliminate their debt and still keep their tax refund. Thankfully, the answer is generally yes and here is Keeping Your Refund in a Washington Bankruptcy is always a plus.
Chapter 13 bankruptcy filers are normally able to retain their refunds due largely to the kindness of the Chapter 13 Trustee in Seattle and Tacoma. Chapter 7 bankruptcy filers are generally able to keep their refunds as well. This is so largely because in the absence of substantial home equity, Chapter 7 bankruptcy filers in Washington may claim the extremely generous federal bankruptcy exemptions.
Currently the federal exemption scheme provides for $1,250 plus $11,850 of the homestead exemption to be used to exempt any property for single filers. This amount is doubled for joint filers. Usually that leaves ample room to protect a refund.
As long as the bankruptcy filer has lived in Washington for the last two years, the federal exemptions are available. If not, the debtor can still claim the the federal exemptions, or failing that exemptions with nearly identical protections, provided that the debtor lived in some mixture of Washington and either Oregon or California for the last two and a half years.
If you have lived in other states beyond Washington, Oregon and California, you will want to consult with an experienced bankruptcy attorney who is familiar with the exemption schemes in other states. Even where the refund is at risk, there are strategies available for protecting all or some of a refund, even where the exemptions fall short.
Book an appointment at any one of our Washington Bankruptcy Law Offices in Seattle, Tacoma or Vancouver or at one of our Oregon Bankruptcy Law Offices in either Portland or Salem, if you have any questions at all about keeping your refund or refunds through the bankruptcy filing process. We would be happy to help.