Bankruptcy Tuesdays

Last week we introduced the concept that tax refunds that you may be entitled to from the IRS or the State of Maine may be among property that your bankruptcy trustee may take. This is not always the case. Maine exemptions (property which can be preserved in bankruptcy) include a right to receive the federal earned income credit and additional child tax credit. So, for example, if you are preparing your 2018 federal tax return and discover that you are entitled to a $4,000 refund from the IRS, but $3,000 of that refund is because of the federal earned income credit, you would not lose your entire tax refund, only $1,000 of it. We’ll talk more about tax refunds next week. Stay tuned!