I came to know that when you file bankruptcy, you must claim the debts as capital gain. Really? I’m filing for Chapter 7 and am really worried as how much it’ll cost me next year if the capital gain is $30,000.

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According to bankruptcy courts, tax refunds are usually considered part of your assets. The court appointed trustee takes these and turns them into liquid money in order to pay off your creditors. But there are certain exemptions and those differ from state to state. However, those things are considered as assets that you possessed at the time of filing bankruptcy. Therefore, only the tax refund for that particular time of year will be considered as asset. Consult a CPA for specific information.

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Last Updated on: Fri, 8 Jun 2018

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