Legal Question in Bankruptcy in Pennsylvania

Pre Petition Credit

I recently filed chapter 13 bankruptcy on March 6,2003. I included back taxes that were owed to the I.R.S for tax year 2002, in my petition. I filed my 2002 tax return 3 weeks after filing bankruptcy and it was ofset by the I.R.S. I was due a refund of $2187.00. I was advised by a representative from the I.R.S that the 2002 tax year was a pre-petitioned credit that was avaible on 12/31/02 and that I am not entitled to recive a tax return until the year following my bankruptcy filing. So when I file in 2004 for the 2003 year I will receive that refund. Is that correct or am I entitled to my 2002 refund. If so how do I go about obtaining it. I filed without a lawyer, because I could not afford the attorney fees, so I am pretty much on my own here.


Asked on 4/03/03, 10:29 am

1 Answer from Attorneys
Matthew Nahrgang Nahrgang & Associates, P.C.

Re: IRS offset in bankruptcy

At the outset, please accept my sincere advise that you obtain an attorney. While there are many forms available and sources of information, the bankruptcy code is very complex. It does not survive the cost-benefit analysis to represent yourself.

Regarding the present question, the I.R.S. does have the right, as does any creditor, to offset any amount you owe them against the amount they owe you. Consequently, they can and will apply your 2002 refund to your back taxes. That in turn means you will not have to pay them what you owe them through the plan, nor a Trustee's commission. In future years, as long as you do not owe the I.R.S., you will receive any refund that you are entitled to.

I trust this has been helpful, but feel free to call or E-mail on a free initial basis.

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Answered on 4/03/03, 10:41 am


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