Do they keep my tax return if I file chapter 7 bankruptcy

The trustee keeps a pro rata share based on the day of filing. Best bet usually is wait to file the BK until after you receive and spend the refund.

It depends on the property exemptions available to you as a resident of Kansas. Depending on whether you can use the federal "wild card" exemption, you might be able to protect the refund. Exemption questions hinge on: 1) local law and 2) the amount of equity you have in your assets. Definitely talk to a local attorney, most offer free consultations.

The tax refund (not the return) that bankruptcy trustees love to take is based on whether or not the refund amount is exempt under the exemption laws where you have lived for more than the last 2 years. I am posting a link to a general description of these laws for you to review for yourself. In some places, you can protect the refund with a wildcard exemption, in other states, there is protection for certain types of refunds, such as EIC benefits, and in other states, no protection at all. The value of the refund is calculated as of the date you file, so if you will be receiving a $6K tax refund and file on 11/30/12, 11/12ths of the refund ($5,500) will belong to the Bankruptcy estate and 1/12 ($500) will belong to you. Hope this perspective helps.

Kansas does allow you to exempt the portion of your refund that is due to earned income credit. Otherwise, the trustee would be entitled to the majority of your 2012 refunds as you would be filing late in 2012. Kansas trustees often do not take any non-exempt property unless they receive more than $1,000.

You can use your state’s “wildcard” exemption to protect any tax refund, whether it’s an anticipated or actual refund. However, in order to be able to claim your tax refund as exempt, you MUST list the tax refund on Schedule B/Personal Property of your bankruptcy petition, either that you are expecting a tax refund or have received one.