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In the process of filing for chapter 13, But . . .

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    In the process of filing for chapter 13, But . . .

    Hello everyone, new to this forum. Today me and my wife met with our attorney to sign the paperwork for filing chapter 13. Little did we know that our tax returns were going to be turned over for payment to our creditors. :-0 After we left his office she was pretty upset and very confused. I currently owe a little less than $4,000 on my suv. My attorney thought it was safer to include it in the Chapter 13. My wife just had our second child (a baby girl) and she wanted to pay the suv off, sell it and use that money towards a more fuel efficient suv. I was trying to explain this to our attorney, but I'm not sure what happened. We did arrive 20 minutes late due to the baby being fussy, so it was a bit rushed. We had plans on using our tax returns to fix some things in the house and possibly use some of it to help purchase another SUV. How does the tax return process work with chapter 13? Does anybody have any input they can kindly share? Is there a possibility to keep our returns? I would hate for 5 years of returns to go out the window. Long story short to what got us into this mess, our home flooded back in Jan 18 and I had to stop working since I worked from home and had to supervise the repairs of our home which was a PITA. Lots of issues with insurance and contractor. Ended up spending a lot of our own money into the house and without my income, we were basically struggling to catch up on our credit cards which were being used to pay for materials and necessary things to finish the house up, since the insurance screwed us over. I could really use some input. Payment plan is set to around $400 a month for 5 years. I told our attorney to hold off filing until me and my wife talked it over. Any input will be greatly appreciated. Thanks guys.

    #2
    Welcome to the forum.

    The turnover of tax refunds and the submission of copies of tax returns depends upon local procedure. In some districts the refunds only have to be turned over if they are above a certain amount. In others all refunds must be given to the Trustee. It sounds like your district requires the turnover of the refunds received after the case is filed. So. . . if you can hold off filing until sometime after you receive, cash and spend the 2019 refunds 2019 will not be issues. You need to listen to your attny since he/she is best suited to knowing the procedures in your district.

    As to the vehicle, the attny may want that secured debt included in the bk because, if you do not have a car payment there will be less "allowed expenses" for means testing purposes and your "disposable income" may be higher. This is a technical issue which may also be district specific. Or, he/she simply thinks it's a bad idea to get rid of one vehicle and purchase another (either with cash or financing) on the eve of filing bk. You need to find out why he/she wants you to keep the vehicle.

    You and your wife need to be comfortable with your bankruptcy. If there are matters that need clarification or matters you do not understand, set another appointment with the attny. It is your bk therefore it is in your best interest to understand and be comfortable with every step of the process. You should be fully engaged with the attny at the meeting. The meeting should not be rushed therefore there should be no distractions that either delay your arrival or interrupt the meeting.

    Des.

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      #3
      You might even want to speak with another attorney. We had a horrible attorney at one point and switched to another.

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