Indiana Bankruptcy and Will I Lose My Tax Refund If I File Bankruptcy?

In a chapter 7 bankruptcy, your tax refund can be taken from you if you are not careful. It is imperative that you consult with an experienced attorney about this matter.

Under Indiana law, the bankruptcy trustee cannot take your earned income credit (EIC) for the benefit of your creditors but it must be properly claimed exempt in your bankruptcy schedules. The trustee can take your additional child tax credit and the federal and state income taxes that your employer deducted from your paycheck.

The month you file for bankruptcy will determine the level of interest a bankruptcy trustee has in taking your tax refund.