Many Florida residents and others around the country are excited to learn that they will be receiving a refund after they submit their tax returns. Financial experts have a litany of suggestions about how people should put their tax returns to good use. However, many consumers are still struggling financially. Research shows that some families are waiting for their tax returns so that they will be able to afford filing for Chapter 7 bankruptcy.
While advisers recommend that people should use their refunds to save for retirement or pay off debt, they fail to realize some families have difficulty just making ends meet. A survey conducted last year showed that almost a quarter of those anticipating a tax refund would use it for everyday expenses. Very few had plans to splurge on a special item or major purchase.
In several instances, refunds were used for medical costs. Consumers that had been forced to delay treatments were able to pursue them after they received their tax refunds. Studies actually revealed a 60 percent increase in health care spending immediately after refunds were received.
Chapter 7 bankruptcy filings also increase significantly after taxpayers receive their refunds. Federal statistics show anywhere from a 15 to 34 percent uptick in filings in March and April. Since filing for bankruptcy can cost at least $1,500, many consumers have to wait to receive their refunds to have sufficient money to file.
Filing for Chapter 7 bankruptcy is just one option for Florida residents who may be dealing with financial difficulties. A knowledgeable bankruptcy lawyer can review someone’s situation, help them understand all the options available to them and recommend the best course of action. A trusted attorney will work with clients to get their financial situation headed in the right direction.
Source: crescent-news.com, “Liz Weston: When a tax refund is a lifeline, not a windfall”, Liz Weston, Feb. 27, 2018