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Tax Return after approved suspension

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    Tax Return after approved suspension

    Hi,

    I was laid off in Feb 08 and our income dropped by almost half. We chose to pick up Cobra (my husband is a diabetic) which was not covered by my unemployment. In June, we asked for a suspension in our chapter 13 payments, because we could no longer make the Cobra payment, regular bills and the bankruptcy payment.

    Our mortgage company filed a petition against the suspension and as a result, the attorney said that we would have to turn over our tax returns. At the time, we didn't think about how paying 634.00 a month in premiums and our part of his medical bills would affect our return, so we agreed. Actually I felt we had no option. Anyway, I found out that we are going to get a much larger return due the extenuating factors.

    In reading the forum, it sounds like some states allow debtors to keep a portion of the return and they must turn over everything else. I emailed my attorney's paralegal this question. She only responded with "you have to turn it over" and gave me a copy of the court order. The order doesn't state an amount. Does anyone know if Tennessee allows chapter 13 to keep a portion of the return? We are still paying off his medical bills and need some auto work done.

    Also we are trying to refinance our mortgage (with the Cobra payment and ARM mortgage increases, our bills are almost $1000.00 a month more than we filed). If that happens, can we petition the court to allow us to keep future returns?

    thanks

    #2
    Did you tell her TAX RETURN, or TAX REFUND, two totally different things that people keep mixing up the terminology in this forum.

    Comment


      #3
      In my email to her, I used the term refund. The court order uses the term refund as well.

      However, I do have some happy news. The court order also states that any payment made during the suspension period will be refunded to us. My husband's employer does an automatic payroll deduction which continued through the entire two months. He didn't want to stop making the payments until he got a court order. The court order did not get sent out until the last weei of the suspension period due to the objection.

      The paralegal faxed the Trustee's office asking for the refund.

      thanks

      Comment

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