discharged? case still open? and taxes?

[pink_amulet]

I have read over the past couple months of questions about about how long a case can remain open, questions about 2006 refunds being taken by trustees, and questions about how a case can be reopened by the trustee up to a year after it was closed.

So here are MY questions:


1. Say your case is discharged 01/01/06, but is still open. Since you have been discharged you have no responsibility to those debts. However, when it comes tax time, and get a refund, is the trustee is able to still take that? Who would it go to, if the debts are all discharged?

and similar scenario......


2. For argument sake....Say your case is discharged 01/01/06, and closed ...say 02/01/05. So all debt is gone, and you have no responsibility to those debts, and you start to build your credit back up, you are doing the happy dance. Then it becomes tax time and you get a refund. Is the trustee able to still take the refund? Would he reopenyour case on the basis of a tax refund? Who would it go to, if the debts were all discharged?

just wondering...

pink-amulet

[StaciMM]

If assets are obtained, they can be taken to be disbursed to the creditors even if that should happen after you have been discharged.

So, if you're discharged but your case remains open (such as waiting on tax returns, or waiting for the sale of property, etc.) creditors would have a chance to file a claim w/ the court for part of the proceeds.

[Minnymouth]

Many think that because they get their discharge - it's over!!

Basically it really it over, just waiting on case to say "case closed".....

But the strong arm of the Trustee does have the right to reopen the case for substantial reasons if he petitions the court. Such as an inheirtance, instant lottery winning, and of course income tax returns.

But usually its all over at the "case closed" level for 95% of all cases.

That's the reason I stress to all newbies that its not over the day after the 341 meeting and its not really over yet right after discharge. Things can come back on ya up to one year after discharge..... thats the right the Courts give the Trustee.... though many trustees never use that right...

Hope I haven't confused anyone!!
Minny

[AMISLANDER]

Great Answer to Great Question...but...

If assets are obtained, they can be taken to be disbursed to the creditors even if that should happen after you have been discharged.

So, if you're discharged but your case remains open (such as waiting on tax returns, or waiting for the sale of property, etc.) creditors would have a chance to file a claim w/ the court for part of the proceeds.

It's still like a catch 22 because even though you're discharged, you're not in terms of acquired assests after you're supposed to be done.

What about the following year's tax return, in a scenario for ex. me...I'm guessing they'll go after my 2006 refund (probably about $500), but could they open back up to take my 2007? What if I win lotto the day after the year is up for my discharge? Would they take that too?

I get more confused with this stuff. $500 is more than fair to give up in regards to $50K of cc debt but it seems the trustees are like the ENERGIZER BUNNY...re-opening & taking without stopping?

[Minnymouth]

You will learn that the Trustee has "more power" than the Energizer Bunny..... if he wants to enforce it. Its falled the "strong arm of the court"....;

Minny

[pink_amulet]

So if they can reopen, how will you know when you are safe? 1 yr?As it is so far we will be getting our refund for 2006. So come next spring when we get our refund, we have to hold on to it for a year??

If so......
That is not fair, because people get credit cards and get cars....right after BK. But you never hear of a trustee reopen a case due to a credit card. I feel if they didn't take it while the case was open...they shouldn't be able to reopen a case....they had there chance!! I can see if you won the lottery that is unexpected money(wouldn't like it but I could understand that rule) But come on...tax refunds....there is nothing new!! Tax time is the same time EVERY year! !

pink-amulet

[Minnymouth]

If the trustee said nothing about your tax refund at the 341 meeting than he's not going after it.
If he told you to report it too him, then he's going to take it if its worthwhile.
Yeah, its a catch 22 on a lot of stuff..... and its the game of "wait it out"...

Minny

[AAAArt]

My 341 is a week from today and I just received a "Information Request" form from the Trustee. One of the questons was re: tax refund for last year and anticipated refund for this year. Answer to both was no, as I pay extimated taxes and nver overpay and besides that the one year I did overpay by about $350, the IRS took it and applied it to back taxes.
I agree w/ Minnie. If he wanted it, he/she/it would prob have asked already.
Art

[pink_amulet]

My 341 is a week from today and I just received a "Information Request" form from the Trustee. One of the questons was re: tax refund for last year and anticipated refund for this year. Answer to both was no, as I pay extimated taxes and nver overpay and besides that the one year I did overpay by about $350, the IRS took it and applied it to back taxes.
I agree w/ Minnie. If he wanted it, he/she/it would prob have asked already.
Art

When we were waiting for our 341, I asked our lawyer what if the trustee asks about our 2006 refund, she turned to me and said this trustee hasn't asked for them all day and we saw him 2pm.
We never received any requests before hand, and he has already ruled us no asset, and we are going on 31 days post 341. So going on that, I REALLY hope the US trustee keeps his nose away ...LOL

pink-amulet