Income tax question

[dmg]

My husband and I just filed for bankruptcy. Our Court hearing is on September 13th. We have always used our tax return to pay off bills (auto insurance, credit cards, and such like that.) This year we won't have the credit card bills to pay, but we still need the money to pay off other bills - student loan or auto insurance.

We are trying to figure out the likelihood of getting our return. Normally, we receive about $1500 return back. My husband and I don't even claim ourselves or our daughter. If the likelihood is not good that we will be getting the return back, then I'm guessing my husband should up his dependents, so at least we'll see more money through the year.

I read something about 180 days, but I'm not certain how that works. Is it 180 days from your Court hearing? Normally we file in January, but if it is 180 days, then we could file in April, if necessary.

Will we know something from the trustee during the Court meeting?

Thanks for any information you can give. My husband and I are a bit uncertain on how it works.

- Debbie.

[HHM]

Odds are, the trustee will want a portion of your tax "refund". (As a general matter, you should always max your deductions for withholding, its your money in the first place and its not doing you any good by sitting with uncle sam).

If the trustee thinks that you will be entitled to a refund for the 2005 tax year, the trustee will ask for a portion of it that you were entitled to up to the date of filing.

For example, lets assume you filed July 1. That means that 180 days of the year have gone by. Lets assume, when you file your taxes next year, you ar entitled to a refund of $2000, the trustee will divide the refund by the number of days in the year (365), and multiply that number by the number days in 2005 up to the date you filed BK

$2000/365 = $5.48
$5.48 * 180 = $986.40

In this example, the trustee would get $986.40 of your 2005 tax refund.

[freshstarter]

I guess I don't understand this...Isn't the tax refund part of the debtor's income that would be used for their expenses anyway?

Also, would a potential Earned Income Credit be considered an asset??