Many people considering bankruptcy are being affected by the decision of several states to delay sending out tax refunds.   One of these states is my state of North Carolina, and I expect to see two different situations come into my office.  First will be the people who were planning on using the tax refund to pay bankruptcy and attorney fees with the refund, and they may find their plans to file bankruptcy delayed until receipt of funds.  Second will be people who were depending on the tax refund to pay something, and when that money isn’t there, that will be the straw that breaks the camel’s back causing them to seek legal advise about bankruptcy. 

For the first group, hopefully a delay in getting the money together to pay an attorney won’t matter too much other than the aggravation of having to wait file bankruptcy.    Many people take a few months to come up with payment for bankruptcy and this often poses no problem.  Depending on the client’s situation, it sometimes makes little difference if a case is filed today, or a few months down the road.  For others, timing is everything.  Each month that passes gives a new set of figures for calculation of the bankruptcy means test, and a debtor’s ability to qualify for Chapter 7 bankruptcy may change with the passing of a single month.

For the second group, they might be helped by this in an odd way.  Many would have likely used the entire tax refund to squeeze out one more month’s payment on their debts, often unsecured debts like credit cards.  Many people who seek my advise come in only after they have exhausted all funds and they have no money left to pay their mortgage or hire an attorney.  By delaying the refund, the client may seek legal advise earlier, while they are still owed money and can make a better decision on how to use it.

The decision to file for bankruptcy is a difficult one, and one that should not be entered into lightly.  If you are having financial problems, the best thing to do is to consult an experienced bankruptcy lawyer to determine if filing for bankruptcy is a good option for you.

see also:

Don’t Lose Your Tax Refund In Bankruptcy by Susanne Robicsek Charlotte NC Bankruptcy Lawyer

Bankruptcy Means Test: Costly and Really Pointless by Susanne Robicsek, Charlotte NC bankruptcy lawyer

BAPCPA The New Bankruptcy Law: A Mean Law by Susanne Robicsek Charlotte NC Bankruptcy Lawyer

Bankruptcy Reform: Costly But Pointless by Cathy Moran, Bay Area CA Bankruptcy Lawyer

Part Four: Kinds Of Income Reported In Bankruptcy; What Is CMI, Also Known As Means Test Income? by Susanne Robicsek Charlotte NC Bankruptcy Lawyer