It is that time of year when you may be looking forward to a considerable tax refund. Over the three decades I have been doing bankruptcy, I see people who have tried to file bankruptcy on their own by “filling out some forms” only to find that tax refunds in the thousands of dollars are lost to the bankruptcy trustee. No, in Colorado, your tax refund is not automatically exempt from being lost in bankruptcy. The trustee can and will take the full amount of your refund that is attributable to overwithholding of taxes.
Sound pre-bankruptcy planning is a primary responsibility of your bankruptcy attorney. Your tax refund can be save with proper planning, and part of the refund might be exempt if your attorney properly claims it as such. We charge a modest flat-fee to handle your bankruptcy, which oftentimes saves our clients thousands of dollars in the long run — and ensures no errors are made that would jeopardize forgiveness of your debts.