Can joint tax returns be taken bya trusteein a Chapter 7 if a married bankrupt is filing individually?

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Can joint tax returns be taken bya trusteein a Chapter 7 if a married bankrupt is filing individually?

I filed bankruptcy solely without my wife. If I file a joint tax return can the trustee take the whole thing even though my wife was not a party in the case (none of her info was included on the initial paperwork) and I was the only one who sighed the waiver to release my return to the trustee? Would my wife be entitled to half the joint return because it’s community property and the trustee be given the other half? All debts included in my filingwere from a previous marriage and were in default before I met my current spouse.

Asked on November 24, 2010 under Bankruptcy Law, Arizona

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

Typically, the non-filing spouse's share of a tax refund is protected in such a case.  However, just how that share is determined varies from jurisdiction to jurisdiction.  There are 3 positions that courts take:

1. The tax refund should be allocated proportionally according to each spouse's withholding in the relevant year (a majority position);

2. The tax refund should be allocated equally without regard to income or withholding;

3.  The refund should be allocated in proportion to each spouse’s income produced. 

You should consult with an AZ bankruptcy lawyer concerning your spouse's property rights.

 


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