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Are you facing two types of filings this year?

While tax season comes the stress of filling out and filing multiple forms. Organizing the necessary documents takes time. Many will inevitably wait for the last minute. While filers feel the pressure of a pending deadline, that anxiety can turn to excitement over potential tax return windfall.

Extra money from a tax return can be used for big-ticket items or a much-needed family getaway. However, those dealing with serious financial struggles need the cash to pay down or wipe out debts. Others with more extreme shortfalls use the proceeds to once and for all find resolution to the stress of not making ends meet.

Money problems leading to tax time have created a seasonal spike in bankruptcy filings. Considering the findings of a Federal Reserve 2015 report, is not surprising that the coveted refund is paramount. Forty-six percent of American adults could not cover a financial emergency of $400.

However, that amount would barely pay court fees to file bankruptcy.

In a review conducted by NerdWallet, filings in March increased from 26 percent to 34 percent higher than the monthly average each year. From 2013 to 2016, April saw filings at 15% to 25% higher.

For many who file their taxes early while facing another type of filing, the money is already spent to retain a Chapter 7 bankruptcy lawyer. However, one uncertainty remains. Will the entire refund cover legal fees that seem to be on the uptick?

Changes in bankruptcy laws in 2005 not only increased the complexities of an already complex process, but also the associated expenses. In turn, many attorneys increased their fee (48% from 2003 to 2009) for a simple, no-asset Chapter 7 bankruptcy, according to the American Bankruptcy Institute Law Review.

While costs are not expected to go down, the average tax return coming in at $2,860 for 2016 could be enough to cover bankruptcy-related fees.

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