The answer depends on what kind of bankruptcy you are filing. If you are filing under Chapter 7 (called "liquidation " or "fresh start"), then any refund for 2009 and earlier (assuming you are filing in 2010), has to be turned over to the trustee (a court officer responsible for overseeing bankruptcy cases and distributing money and property to the creditors). The way to avoid this result is by waiting until after you receive your refund before filing for bankruptcy. You can then spend the refund on necessary expenses or convert it into exempt property. However, you have to be careful about how you spend the tax refund - if a court determines that you improperly tried to hide your assets, there may be serious consequences, including possibly a denial of discharge. If you are going to choose this approach, it is best to consult with an experienced bankruptcy attorney in your area.
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If you are filing under Chapter 13 (called "debt adjustment" or "reorganization"), you will not have to give your refund for pre-bankruptcy tax years to the trustee. However, you will have to pay your creditors the value of the refund over the length of the Chapter 13 plan, unless, again, you receive the refund prior to filing bankruptcy and either spend it on necessary expenses or convert it into exempt property. To learn more about the bankruptcy process and the differences between Chapter 7 and Chapter 13 bankruptcy, take a look at the link below.
The above is provided for informational purposes only. It is not intended as legal advice, and does not create an attorney-client relationship.
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