income taxes chapter 13

[dylancarly]

As a filer of chapter 13 under the new law I think I am required to submit my tax returns to the trustee each year during the plan. Does this mean that we will submit new shedules of expenditures every year for better or worse and adjust the plan payment. As I have said in a previous post I forgot some expenses however I also got a small increase that probably offsets this. However for many people I would imagine that after a few months into their plan one realizes they forgot something or a certain expense has gotten higher such as gas, utilities, unexpected kid expenses etc. I cant imagine that a trustee wants to re-review thousands of debtors expenses every year but if they are going to scrutinize tax returns for increases then I would think they would have to examine expenses as well. Any thoughts.

[SinkingFast]

Some people here have had to surrender their entire income tax refunds. Others were told they could keep up to $1000-$1500 of income tax refund and must turn over the rest to the Trustee.

Whether or not you get to keep any of your income tax refund depends on the area of the country you live in and your Trustee.

If you've already filed, take a look at your Ch 13 plan papers. It probably says something in there about income taxes and how much you get to keep, if any, during your plan payments.

[lrprn]

See my responses to your questions below in red - hope this helps!

As a filer of chapter 13 under the new law I think I am required to submit my tax returns to the trustee each year during the plan.

As SinkingFast said, this depends on your trustee and local bankruptcy court customs. Ask your lawyer about this.

Does this mean that we will submit new shedules of expenditures every year for better or worse and adjust the plan payment.

Unless something changes that significantly impacts your ability to pay your monthly payment to the trustee, it isn't necessary to file to amend your Ch 13 plan payment (or change your Ch 13 to a Ch 7 case if the change is truly catastrophic income-wise and is going to last more than a few months). Typically it takes something drastic outside your control (car accident with injuries making it impossible to work for 1-2 months, divorce, job loss, etc) to need to amend your Ch 13 plan and change your monthly payment. For a short-term emergency (car repair or unexpected doctor bills, for example) your lawyer can approach your trustee and request skipping a payment for a month or two (although that then lengthens your payment schedule by the same amount of time).

As I have said in a previous post I forgot some expenses however I also got a small increase that probably offsets this. However for many people I would imagine that after a few months into their plan one realizes they forgot something or a certain expense has gotten higher such as gas, utilities, unexpected kid expenses etc. I cant imagine that a trustee wants to re-review thousands of debtors expenses every year but if they are going to scrutinize tax returns for increases then I would think they would have to examine expenses as well. Any thoughts.

Doing this for every current Ch 13 filer in the US every year would grind the bk system to a halt. Some trustees are willing to do this for tax returns because (1) it's easy; (2) it's straightforward; and most importantly, (3) it nets a decent sum for creditors that's worth the trustee's time to go after. The Ch 13 system is set up to reflect what you have on your forms on the day you file for the coming 36-60 months. That's what makes Ch 13 so difficult - life stuff happens that requires adjustments. Those adjustments can be made two ways - amending your plan officially by filing an official court request or your lawyer speaks to your trustee to request a short-term, unofficial adjustment.