2017 Tax Refunds in Bankruptcy in Ohio

In Ohio your tax refund is part of your bankruptcy estate. It is important to understand how this works:

  1. If you file a Chapter 7 Bankruptcy between October 2017 and April 2018 your 2017 tax refund or at least part of it belongs to the bankruptcy court. If you file your bankruptcy in October 83% of your refund belongs to the bankruptcy estate. It counts as an asset. Your Bankruptcy Trustee may get to take part of your refund.  The closer to the end of the year the more of your tax refund belongs to the trustee. Once January occurs 100% of your tax refund belongs to the trustee.
  2. You are allowed to use your exemptions to protect the refund. There are 2 exemptions available to protect your refund. You can use your cash on hand exemption of $475.00 and your $1250 wild card exemption. These exemptions can only be used if you have not used them elsewhere.
  3. You can also protect the amount of the refund that is earned income credit or child tax credit.
  4. Different rules apply if you file a Chapter 13 Bankruptcy. The Chapter 13 Trustee in Dayton has agreed to allow you to keep the first $3100 of your Tax Refund or your Earned Income Credit (EIC) and child Tax Credit.  You get to keep the larger amount.
  5. Once you get to January  need review your tax return and the status of your refund before you file. 100% of the refund is part of the bankruptcy estate. You may want to consider filing  your taxes before the bankruptcy .You can then  spending the refund on necessities and living expenses.
  1. The most important thing you can do is review your tax refund with your bankruptcy lawyer before filing.