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  1. #1
    Join Date
    Oct 2014
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    Default Tax Withholding and Eligibility for Chapter 7 Bankruptcy

    My question involves bankruptcy in the state of: Arkansas

    I'm in the process of filing chapter 7. We pass the first part of the means test but my husbands Social Security is added in the second part of the test and shows $360 disposable income. My lawyer advised me to have more taxes taken out of my paycheck ($200) is this good advice? Way i understand the trustee looks at the past 6 months. So how would and extra $200 taken out in the future help any?

  2. #2
    Join Date
    Sep 2005
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    Default Re: Tax Withholding and Eligibility for Chapter 7 Bankruptcy

    I can't tell you why the lawyer believes that will be effective, given that your disposable income is examined over a six month period. I suggest that you ask him.

    Is your tax withholding presently correct, such that your withholding and tax liability is roughly equivalent? If you're not presently withholding enough money, perhaps your lawyer hopes to persuade the trustee that some of what appears to be discretionary income should have been withheld as it will go to your taxes.

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