Thx - Timing of Tax Refund --pay bills ?

[leelee]

Are we able to pay bills (medical/cc) with that money... if we received it before filing.

If not, if someone could explain WHY if a person is trying to do the 'right thing' to pay off creditors however much they can . . . ????

[leelee]

The amount of our state refund was $800...

[jal1129]

This is how it was explained to me for our district, hopefully this will make sense! The look back period is 6 months. Any money you recieve during that 6 month period will need to be able to be exempted or the trustee will take it as an asset to disburse to your creditors. Which is why they look at your bank statements. Likewise you need to be able to exempt any money in your bank account the day you file, earned but unpaid wages at the time of filing etc. The exemptions seem to vary wildly by state, some states you are able to exempt any child tax credits, etc

When we went for our consult one of my first questions was can we spend our refund (which we received before we filed). I was asked how much our refund was going to be, I answered, and was then told as long as it was under $2000 we could exempt it.

This had just been my experience.

[jal1129]

I just went back and reread your original post and wondered why are you trying to pay cc's when you are getting ready to file bk?

[wrinkleigh]

I agree with jal, medical bills and cc's should be at the bottom of the list. They can be discharged. If you are absolutely committed to filing, I would not throw money away, which is what you will be doing by paying cc's and med bills.

Go buy yourself some new clothes, do a repair to your house, anything that is a "necessity" that maybe you have neglected because you have been struggling financially.

Good luck to you.

[HelpMeFast!]

Use it or lose it...

I agree with the others, don't pay the cc's or medical. We just filed a couple of weeks ago and our lawyer had advised us at our first meeting to file our taxes ASAP and then use the return for things that we needed (such as his fee, car repairs, home repairs, etc.). We're in Texas, but there is also a Federal exemption called the wild card. Depending on your situation, you might be able to keep it under that. It just depends on how much cash you have on hand, equity in home and vehicles and other things. We were a no asset case. We're upside on our car and break even on our mortgage. He still suggested we use the money for the things we needed because it lessens the amount we have in the bank when we file. The amounts of all of our asssets were recorded the morning we filed and that took away from our wild card exemption. The less you have when you file means the more you have preserved of the exemption for the future. You never know when you will get a windfall of money from an unknown source. The wildcard applies to those types of things.