Dept. of Treasury Kept My Personal Tax Refund

[Joe1]

My question involves bankruptcy in the state of: Florida

Hello,

I had a Chapter 11 bankruptcy of which I ended up losing my business. There were only two real players in the Bankruptcy. First position Lean holder on property ( local Bank ) and Second position lean holder on property ( SBA ). My wife and I personally signed on both notes.

Question - Bankruptcy is over. Dept. of Treasury kept my personal tax refund for the underpayment to the SBA loan. Is this possible? And if it is, I am guessing they will continue to keep my tax refund until debt is paid or I file personal bankruptcy as well. I was hoping to avoid personal bankruptcy.

Thanks in Advance

[flyingron]

The bankruptcy absolves only the party involved in the bankruptcy (your business). You are still liable for your personal guarantees.
The same thing happens when you have two coborrowers and one declares bankruptcy. They could get their obligation discharged while the other borrower remains responsible.

[despritfreya]

Your post is confusing. You say “you” (actually "I") but also refer to a business. So, is flyingron correct in that your business entity (Inc. or LLC) filed a bk? If this assumption is correct then the entity's bk does not protect you as was pointed out.

On the other hand, I must assume that if you personally filed a Chapter 11 the case got dismissed because you could not complete the Plan and obtain a discharge. If that happened you are still liable. If you personally obtained a discharge (more likely in a Chapter 7 as opposed to a Chapter 11), then the seizure of the refund was improper.

Des.