Will the court take my tax refund?
In most cases, no. You can often protect your tax refund under the exemptions you can claim under Virginia law. Bankruptcy trustees are only concerned with any tax refund you will receive after your case is filed. During the tax refund season, we look very carefully at the refunds you expect and how they can best be protected. DO NOT PAY BACK A FRIEND OR RELATIVE FROM YOUR TAX REFUND. The bankruptcy court can require that person to give the money you paid them to the bankruptcy trustee. If you want to pay the person back, you may be able to do so AFTER you file bankruptcy and have claimed the refund as exempt (which you and your friend can’t do after you pay the money back).