Bankruptcy Blog

You may look forward to receiving your tax refund in the hopes of covering any necessary or emergency expenses that have come up throughout the year. If you are in a Chapter 13 bankruptcy you may think that keeping your tax refund is necessary to help you cover needed family expenses. Unfortunately, most trustees in a Chapter 13 bankruptcy require that any tax refund be paid into your Chapter 13 plan. Generally you will be required to submit your tax returns to the trustee every year and any refund that you received. In some areas the trustees exercise some discretion and may allow you to keep the tax refund. In general most Chapter 13 plans require that you contribute your tax refund as part of your Chapter 13 plan. You should check with your local bankruptcy attorney to determine the general practices of the trustees in your area and whether the trustee may allow you to keep your tax refund.

In bankruptcy generally you can discharge the edd unemployment overpayment but many courts find that the unemployment insurance overpayment can be recouped after bankruptcy. This means that if later on you seek unemployment benefits they can withhold from your benefits the overpayment until it is fully paid back. In a sense this means that although technically the debt has been discharged in bankruptcy, you may still end up paying the debt back through recoupment. Also EDD overpayments are not dischargeable if they involved some form of fraud or misrepresentation in obtaining the funds.

Many credit unions are notorious for placing cross collateral clauses in their car loans. Signing an agreement with a cross collateral clause means that you are putting up the vehicle as collateral for both the car loan and any other loans or lines of credit you may obtain with the credit union. Many clients are unaware that their car loan contains small print indicating that the vehicle is not only security for the car loan but for any other line of credit or loan with the credit union. Cross-collateral clauses can become a serious problem in bankruptcy because many credit unions will require you to reaffirm both the car loan and any cross collateral loans in order to keep the vehicle.

Most people who are filing for bankruptcy are concerned about having relatives or neighbors know that they are filing for bankruptcy because of the bankruptcy being a public record. This is very unlikely since it is rarely reported in newspapers and access to the public records generally requires access to PACER a system on which the information is available. Most relatives, friends, and neighbors are not aware of how to access the system and they also need to setup an account in order to search for the information which rarely occurs. The likelihood that your circle of friends, family or neighbors will gain access to information on whether you filed for bankruptcy is highly unlikely.