Spending Twist: Tax Refund Pays For Bankruptcy Filings

[Purveyor]

While most people figure they'll use their tax refund to pay bills, sock away some savings or splurge for a night out, others are using it to foot the bill for going broke.

Hit by job losses, health problems or heavy mortgage debt, some cash-strapped consumers are counting on refunds to handle the legal costs of filing personal bankruptcy.

"I'm not kidding when I say nearly every client I have is telling me they are going to use their tax refund to pay for their bankruptcy case," said Walter Benenati, an Orlando consumer bankruptcy lawyer. "And I don't see that trend changing any time soon."

Going broke was the last thing on Roy Conejo's mind a year ago. The Walt Disney World worker was making decent money, enough to pay his bills. But when the economy tanked, his hours were cut and his bills skyrocketed.

The Kissimmee man found himself in Orlando's federal bankruptcy court last week along with more than 100 people going through the grim paces of insolvency. Husbands, wives, sometimes entire families came before the U.S. Bankruptcy Trustee.

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Orlando Sentinel: http://www.orlandosentinel.com/business/orl-biz-bankrupt-031109,0,6923822.story