Here is the question from AVVO.com”
Filing Chapter 13, should we file before year end or wait until we get our tax return (money from refund)?
Husband and I are filing Chapter 13, just have been trying to save up for lawyer. As we are getting to end of year, tax season is right around the corner. We get a pretty large return each year, ave. $6-8,000. If we were to file our tax return in early February and get our return by end of February, could we theoretically file Chapter 13 in March and keep our return or use that money to pay attorney? Will the Trustee want it? I realize that in Chicago if we are not in 100% the Trustee will get our return if we file before end of year?

My answer:
Most likely, it is best to wait until after you get the refund (the money) from the tax return. Then you can use the money to pay your lawyer. Also, the Chapter 13 trustees in the Chicago area generally require you to pay any refund into the plan to be paid to your creditors. There are many ways to deal with this problem in the future during a Chapter 13.

But, it is most important that you consult with an experienced Bankruptcy attorney right away, because there may be other factors which would require you to file sooner. For instance, if there is a foreclosure case going on, there are many deadlines, which could make it important to file right away.

Call an attorney now. Even if you don’t have all the money necessary to file a case. We offer free in-person consultations with an attorney.

Daniel J. Winter
BankruptcyLawChicago.com
312-789-9999
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois.