By: Darrell Castle
If you need to file for bankruptcy, then by all means use your tax refund if you’re fortunate enough to have one.
Can you use your tax refund to pay for your bankruptcy?
Hi, I’m Darrell Castle and I’m an attorney licensed to practice law in the state of Tennessee, and the answer to that question is YES, you can use your tax refund money to pay for your bankruptcy. There is no reason why you’re not able to do that.
The fact that you have a tax refund indicates that you overpaid on your taxes. You understand that you’ve been making an interest-free loan to the government. But nevertheless, if you have a refund that’s good news because it means that you don’t owe the government any money. Because if you owe them any money then they won’t give you a refund.
Take that money that you’re refunded if you need bankruptcy services, if you feel like you’re in a position where you have bills you can’t pay, you’re behind on your house note, car note or anything like that. If you need a bankruptcy, there is no reason in the world why you can’t take that refund and pay for it.
In my jurisdiction here in Memphis — West Tennessee — you can exempt $2,500 of your refund without any problem whatsoever. If it’s more than that, you can cover that too. It’s no problem.
That is something you can do and you should do if you’re having those types of problems.
Because some people go their whole lives and they carry this baggage with them — financial baggage — that just wears them down. They just live under it and are pressed by it and they think about doing something about it but they never do. They just put more stuff in the bags they’re carrying and they just never seem to understand they could just set them down anytime they wanted to.
So if you need that kind of service folks, then you use that tax refund to pay for it.
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