200,000 families used their tax refunds to file for bankruptcy

200,000 families used their tax refunds to file for bankruptcy (Alberta Times) Tax refund checks have been arriving, and USA Today reported that some people used their tax refunds to buy high-tech refrigerators...

(Alberta Times)

Tax refund checks have been arriving one after another. USA Today reported that some people used their tax refunds to buy high-tech products or go on vacation, but more than 200,000 families also used their tax refunds to file for bankruptcy. According to the latest survey from the National Bureau of Economic Research, due to rising bankruptcy filing fees and attorney fees, some families with poor financial conditions have to wait until they receive tax refunds before filing for bankruptcy. A situation that bankruptcy lawyers have long been familiar with is that after people receive their tax refunds at the beginning of each year, there will be a surge in filing for personal bankruptcy. This situation has been particularly significant after the bankruptcy law was revised in 2005. The attorney fees and administrative fees for filing for bankruptcy were 921 yuan in 2005, but two years after the bankruptcy law was revised, the fees rose to 1,477 yuan. Most of the increased costs are attorney fees, because after the bankruptcy law was revised, lawyers have to confirm more relevant information about bankruptcy applicants before they can complete the bankruptcy application procedures. The purpose of amending the bankruptcy law is to prevent filing for bankruptcy from being too frivolous. Before the law was revised, those who advocated the law believed that many people who could not repay their debts used to file for bankruptcy to avoid repaying their debts. After the law was revised, the number of bankruptcy applications decreased, but this does not necessarily mean that the situation of bankruptcy has improved.