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Posted Jan 27th, 2012
What happens if you have spent your tax return and then decide to file bankruptcy in Indiana are
there penaltys for that?



Legal Topic Area: Bankruptcy in IN

There are no negative consequences for spending a tax refund that you received before you filed bankruptcy. The money was yours to spend.

Questions frequently arise when the debtor, the person who has filed bankruptcy, receives the refund after the case is filed.

Those issues aren't present when the refund has been received and spent before the bankruptcy trustee comes on the scene.

Cathy Moran

Ask a Lawyer Panelist since 2002


Answered on Jan 31st, 2012 at 5:06pm