This is the time of the year that you may be filing your taxes early to obtain a tax refund. If you are in financial debt and are considering bankruptcy as an option, your tax refund monies may enable you to pay an attorney to assist you with the process. An often overlooked issue is how you spend the remainder of your refund. It is important to note that if you are contemplating filing a bankruptcy, you need to avoid repaying or gifting monies to family or friends on the eve of or in close proximity to a bankruptcy filing without consulting an experienced bankruptcy attorney. If you have already done so prior to speaking to an attorney, you still may fully protect the refund but only a competent attorney will be able to guide through the process. A Trustee is appointed under the rules of bankruptcy to evaluate your assets and liabilities and income and expenses. Monies paid to family or paid to friends in the scenario are frowned upon under the bankruptcy preference rules. As a general rule, no creditor or family and friends may be given special treatment with respect to monies transferred to them within one year of the filing of the case for $650 or more. If so, this may result in a demand from the Trustee to your family or friends to return those monies for the benefit of all creditors. For a thorough analysis of this issue whether you have a preference problem when you file a bankruptcy and the strategies for defending yourself against this, including solvency (an asset versus liabilities analysis yielding a positive result), consult an experienced Bronx/ Westchester attorney.