Tax Refund

[lsutton1974]

Of course it is that time of year and this is my first time filing taxes since Chapter 13 was filed. It says nothing in our plan or confirmation about turing over our tax refund. We have some paperwork from out lawyer that says the trustee CAN keep all but $600 per couple. I don't know what to do. I know it sounds terrible but I don't want to call my attorney about it in hopes that we can get our tax check. It won't be a ton but maybe $1500 or so. What happens if I keep the money? Since there is nothing filed that says I have to turn this over I thought maybe I could go ahead a keep it.

[dac67]

We are in the same boat as you. We filed April 2006, and this will be our first tax year. Also in our conditions of our confirmation letter there is nothing about turning over our tax refund, I don't think we will get much at all, we upped our deductions so we wouldn't get alot back. I also don't want to ask our attorney, I have always felt not easy with him, and he is the one we are supposed to trust. I have always felt he is in cahoots with the trustee, so I am playing dumb and waiting to see what happens.

[lsutton1974]

I think we are going to play dumb also. I feel as though he doesn't answer anything properly anywat.

[StevieD]

We have been in a chapter 13 since 09/04 (100% payback). Thus far, we have not had a problem in receiving our refunds from the IRS. There have been about a two week delay in getting confirmations from the trustee but the balances were deposited into our accout.

Initially, we did reduce the exemptions but I did not claim as many after changing jobs a year or so ago. We have gotten back $2,100 and $6,400 for the past two years. The last increase was after including the day care exemptions for a new addition to our family.

[aa06a47]

The key here is to change your exemptions so that the trustee doesn't get your tax refund next year. You have made it this far in your chapter 13 so don't let turning over a 1 or 2 thousand dollar tax return to the trustee bother you....and by all means, do as your trustee told you in the meeting. If the trustee said you can keep 600 of it, keep 600 and send the trustee the rest of it.

I feel the same as you all...I don't want to send it to them. I miscalculated by about $800 bucks so will just try and make adjustements to next years withholdings to make that amount smaller next year.

[lsutton1974]

The trustee didn't say anything about it. It was just in some of the paperwork on explaining a chapter 13 we got from our lawyer when we filed. I have changed my exemptions but will still be getting money back I did't change them until August. It is not anywhere in our plan, confirmation, or anything.

[helpless]

Our trustee told us we could keep ours that when we filed to make sure that we have the IRS send us a check and not have it directly deposited into our account because we are in a 13 it won't throw up any red flags. We can efile just not have them direct depsit it. We did that last year and got our refund check and no one ever said anything. We will change our deductions this year once we figure it all out because I would rather have the money every month. I need it!!!

[aa06a47]

I wrote my attorney asking about my refund. She told me that I got to keep 1000 and the trustee got everything else. Then she also said, she advices her clients to send the entire refund amount in to get done quicker....I ain't biting on that worm until I hear chapter 13's can pay off after 36 months under the new law without a 100% payback.

[cso5@]

My thought was....

If after I heard from my lawyer, and he said, yup, you gotta give your refund to the trustee --

I would have applied any refund to NEXT year's taxes. You know how you can do that?

(I am getting a refund despite changing my withholding.)

And my master plan would have been, keep applying any "refund" to the next year's taxes, and then when I was safely out of my 13, get one mother of a refund.

But my lawyer says I can keep it. It's not a whole lot anyway, but as all my fellow 13'ers know -- every little bit helps.

cat

[IN-DEBT]

chapter 13

Our plan states anything over 1500 goes to the trustee. This is clearly stated on the paperwork. This is not just our plan but all 13's in our area as the brochure that states this was given to everyone at our 341. We all got the same paperwork and our trustees website states the same.

[quietsound]

Our lawyer added in our refund as "income"....meaning he added in $250 per month as additional income per month so that we can keep up to $3000 of our refund. last year we got back $2300 .....this is our first year of filing chapter 13 in 2006............he did the same thing with my husband's yearly bonus, he took the bonus amount, divided by 12 and added it as per month income so that we could keep the bonus.

check to see on your paperwork if your lawyer added your refund as "income".

[kags1969]

Just another experiance point... I owed about 21000 in taxes when I filed 13 and had a 1000 refund my first year. I requested a refund, but the IRS applied it to the outstanding debt. 13DataCenter reflects a lower claim amount by the same 1000 with a "Taxes/Offset" note. I dont know if this extra $1000 dollars will reduce the total amount that I have to pay "out of pocket" into the bankruptcy. I am 19 months in and hope to pay off at 36 months... I have a 42 month plan w/ about a 38% unsecured payback...

[bige1030]

I would have applied any refund to NEXT year's taxes. You know how you can do that?

On your 1040, there's a line that says something like "amount you want applied to your 2007 estimated tax" - write that amount in there.

[dac67]

Our lawyer says we can keep ours and we don't know if the trustee will want our tax papers, so the lawyer is going to take a copy just in case he ask for them. Hopefully not!

[bmcmull]

We filed our BK in september of 04 and it confirmed in 05 I think february. When I filed my 04 return we got that money. It did not even fly by the trustee. $1800.00 I think it was. However the next year because I was confirmed, I thought I would get the money if it was under a certain amount $4000.00 I think was our ceiling , but you would need a explanation as to why it was so much. I sent in a return for $3800.00 and it was sucked up by the trustee, he did not care at all that we had children in the hospitol at the time. I doubt he even read the explanation. Just put a big confiscated stamp on it..... In Texas I believe the number is $2000.00 with out an explanation that comes to you, but it is a crap shoot. I think it is like the federal government where they turn evrything down initially and require you to get an attourney to fight for your money. Banking on the fact you wont have the extra funds to do so.