Received Notice of Confirmation In Mail

[aa06a47]

OK, I received my order confirming chapter 13 plan in the mail Tuesday. Line #6 and #12 buggs me somewhat.

6) For cases filed on or before October 16, 2005, the debtor shall devote to the plan all disposible income during the first 36 months after the first payment is due under the plan unless the debtor pays 100% to all filed and allowed claimants. For cases filed on or after October 17,2005, the debtor shall devote to the plan all disposible income for payments to unsecured claimants for the applicable commitment period from the date the first payment is due defined in 11 usc 1326a1. The debtor shall report to the standing trustee any events affecting disposable income, including but not limited to: tax refunds, inheritances, prizes, lawsuits.... which are receivable during the pendency of the case.


12) Notwithstanding this Order, the trustee may move to modify the plan in the event tax refunds due the debtor are not exempt, based on pending appeal in In re Benn, Case no. 06=2217, USCA for Eighth Circuit.


To me, #6 means your stuck for 5 years with no hope of early payback / discharge and #12, I have no idea what the heck that means.

If anybody can share some insight, I would appreciate it. Thanks.

[lrprn]

OK, I received my order confirming chapter 13 plan in the mail Tuesday. Line #6 and #12 buggs me somewhat.

6) For cases filed on or before October 16, 2005, the debtor shall devote to the plan all disposible income during the first 36 months after the first payment is due under the plan unless the debtor pays 100% to all filed and allowed claimants. For cases filed on or after October 17,2005, the debtor shall devote to the plan all disposible income for payments to unsecured claimants for the applicable commitment period from the date the first payment is due defined in 11 usc 1326a1. The debtor shall report to the standing trustee any events affecting disposable income, including but not limited to: tax refunds, inheritances, prizes, lawsuits.... which are receivable during the pendency of the case.


12) Notwithstanding this Order, the trustee may move to modify the plan in the event tax refunds due the debtor are not exempt, based on pending appeal in In re Benn, Case no. 06=2217, USCA for Eighth Circuit.


To me, #6 means your stuck for 5 years with no hope of early payback / discharge and #12, I have no idea what the heck that means.

If anybody can share some insight, I would appreciate it. Thanks.

Agree with you about #6

Did some searching about the Benn case in #12 - I found this at http://www.courthousenews.com/circui...8thcircuit.htm :
________________________
BANKRUPTCY, TAX

Benn v. Cole, April 6

The lower court overruled a claim of exemption to a federal and state tax refund and ordered turnover of the refund to the Chapter 7 Trustee. The circuit holds that tax refunds are not subject to attachment and execution under Missouri or federal law, and are exempt under the Missouri statutory provisions on exemptions. Therefore it was error to disallow the exemption of the tax refunds. Remanded.
_________________________

This could be good news - I read this to mean the circuit court overruled the lower court's earlier opinion that the Ch 7 trustee was entitled to take tax refunds. The new circuit court opinion is that a Ch 7 trustee *cannot* take tax refunds from a Ch 7 debtor because the refunds are exempt - at least in MO where you are .

[SinkingFast]

Yep,.......... Unfortunately #6 sounds like you're stuck for the duration to me as well. Which is what I thought when I initially researched New Law. That that was one of the changes. Old Law, you could buy out at 36 months. New Law, you'd have to pay back until you hit the 100% level. But, as we all know, it's all so new and they're still working out kinks.

Your income tax refund note gives us all something new to research. We all should check our States to see if there's a Statute exempting income tax refunds from BK.

Congrats and sorry for you at the same time. But, as Minny says,........ This too shall pass.

[jane taylor]

Just found out our Plan was confirmed on 6/14/2006, but haven't received notification yet. We are at 0% to unsecured so I know there's no way we can get out of this one early. Some days I don't know if I can make it for 56 more months, but you do what you have to do!

[aa06a47]

Agree with you about #6

Did some searching about the Benn case in #12 - I found this at http://www.courthousenews.com/circui...8thcircuit.htm :
________________________
BANKRUPTCY, TAX

Benn v. Cole, April 6

The lower court overruled a claim of exemption to a federal and state tax refund and ordered turnover of the refund to the Chapter 7 Trustee. The circuit holds that tax refunds are not subject to attachment and execution under Missouri or federal law, and are exempt under the Missouri statutory provisions on exemptions. Therefore it was error to disallow the exemption of the tax refunds. Remanded.
_________________________

This could be good news - I read this to mean the circuit court overruled the lower court's earlier opinion that the Ch 7 trustee was entitled to take tax refunds. The new circuit court opinion is that a Ch 7 trustee *cannot* take tax refunds from a Ch 7 debtor because the refunds are exempt - at least in MO where you are .

Thanks for the link. I interpret it two ways for a Chapter 13 person.

1) Could be good new...means trustee won't get any of tax refund...(at the 341 meeting, he wanted anything over 1K) ... or

2) Bad News, trustee will build the tax refund into the plan. So, if a person normally was getting 2k back in a refund, the trustee may say, well, I want another 170/month and you best adjust your exemptions at work.

Guess time will tell. Thanks.

[aa06a47]

Yep,.......... Unfortunately #6 sounds like you're stuck for the duration to me as well. Which is what I thought when I initially researched New Law. That that was one of the changes. Old Law, you could buy out at 36 months. New Law, you'd have to pay back until you hit the 100% level. But, as we all know, it's all so new and they're still working out kinks.

Your income tax refund note gives us all something new to research. We all should check our States to see if there's a Statute exempting income tax refunds from BK.

Congrats and sorry for you at the same time. But, as Minny says,........ This too shall pass.

My attorney still contends that you have the option of paying the POT after 36 months. When I get there, I will look into it. I would really like to get out of jail before 5 years. Of course, to get out of jail would require borrowing money....not a good thing.

[helpless]

Wow aa, we are pre 10-17 and in our order it mentions nothing about tax refunds, job changes, increase of income, just to pay 557.00 for 37 months. Basically was told to keep our noses clean and just pay and we should never hear anything from the trustee again until discharge. That is why I was so paranoid about my payment being late.

[bobby125]

aa....I spoke to my lawyer (different one than whom I met with) after my 341 on monday

on paying off early (i.e.36 months) he said dont even risk it. My plan is supposed to be 54 months and I have a rental property that the loan comes up on in 36 months, so I thought it would fit perfect. I am at 23% and he said dont bother

on the taxes.....I was told (and now I forget if it was the trustee or the lawyer afterwards) no refunds for me for 3 years. I asked if I get a refund should I send it to the trustee or let them ask for it. He said let them ask for it....

now, that brings me to the withholding adjustements. For the past 2 years, I have basically broke even on my taxes, even though I have a ton of write-offs. I did so by claiming exempt most of the year and paying taxes the last 3-4 months.

So, now I have 2 options:

A. continue on the same tax system as before. i.e. no returns, but bigger take home pay, which could in effect, raise my future contributions. My payment was based on the past 6 months and that waqs without taxes, so I actually screwed myself.

B. have the taxes taken out, but then get a refund.

Note: I get a monthly commission check and no matter how you adjust your dependants that always get taxed the same and that is what would kill me in terms of getting a refund


I know I have rambled, but I have made the decision to go tax exempt and pay taxes the last few paychecks. The way I figure it is this way:

What is more likely?

A. I pay the taxes now and get a, I don't know, $5,000 refund and the trustee comes and takes it.

B. I dont pay the taxes, get larger take home checks and the trustee reviews the case and raises my payment

I have to think that A is much more likely than B. I just think they will keep an eye out for refunds and hey if they come back and see my take hom has gone up, than good for them

Sorry for the long reply just been thinking about this one.

If I didnt get commissions, then I would adjust my withholdings to come out just right. Your tax attorney can help you with that.

PS I was told nothing about notifying the trustee about salary increases, large commissions, etc

[DOA]

Ok, so being pre 10-16 does that mean I end up with 36 months as asked for, and no motion has been made against it, or that after 36 months they will tell me to keep paying?

[13inOR]

off the topic,but glad to see a post from DOA--I know myself and others have been wondering about you! Glad to see you around! I knew you had had some health issues so hope you are doing better. : )