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Tax Rebate
Most people who are considering bankruptcy will soon receive the economic stimulus tax rebate recently passed by Congress and signed by President Bush. Someone asked me today whether a bankruptcy trustee will try to seize the refund as part of the bankruptcy estate. Normal tax refunds are part of the bankruptcy estate, and debtors must turn over future tax refunds to the bankruptcy trustee. The bankrutpcy trustees have not taken a position on this issue. However, the last time the government gave a special money distribution to jump start the economy the bankruptcy trustees adopted the policy of not asserting any claim to the money on the theory that the money was not a refund of the debtor's pre-filing assets. I expect that this year's stimulus payment will remain debtors' property.
February 14, 2008 in Bankruptcy Questions | Permalink
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Apparently the trustees are taking a position on this issue, and many are choosing to seize the stimulus package funds. This recently happened to a client I represent for a chapter 7 bankruptcy in Fort Myers, Florida. The trustee cites a case to support this, Clifford Morine, 9-07-bk-08726-ALP.
Posted by: Lisa Torelli McCue, Esq. | Aug 21, 2008 2:42:50 PM
I just recently had the 341 meeting in the southern bankruptcy distict of Indaianpolis. My petition was filed before the stimulus package was signed by Bush. The trustee filed a motion to seize my federal and state taxes which equal about $430 together along with my stimulus package rebate which he said would equal over $1000 all together. My lawyer stated that he he would object to the motion and litigate the issue in court if needed.
Posted by: jason | Feb 26, 2008 8:37:18 AM
