Trustees control of finances over the life of bk13......

[drowninginflori]

I have seen many people post notices on the board about the fact that when you file a chapter 13 the trustee is in control of your finances for the life of your payback. I understand that the trustee will need copies of tax returns and will get any refunds that we might be owed and that they will also need verification of income from time to time (to see if our pay has changed). My question is this.....Will they be monitoring the coming and going of funds from our checking account? I understand that our finances will be scrutinized in most areas but do I need to be concerned each time I run my debit card card at a store that the debit will be questioned? I hoped that is not the case and I figured that it would be extremely hard for a trustee to keep daily tabs on each of the people who have filed in their jurisdiction but since I wasn't absolutely sure I hoped someone could explain that process to us.

[laurannm]

No, I have never heard of a trustee scrutinizing every debit purchase made. For the most part all the trustees really care about is making sure you make your payments on time.

Of course if you come into a large sum of money (such as an inheritance, large cash gift, etc.) you may need to report that to the trustee, but that depends on your district.

Not every district will require you to submit tax returns and give up your refund. It really varies from district to district. Ours for example is so overloaded with cases that they do not have the time or resources to check everyone's tax returns for income increases, thus they do not require debtors to submit tax returns, nor do they take your refund, and as long as you stay under the radar and make payments on time, you'll be fine.

But again, this may not apply to your district...your attorney can best answer how things are handled in your area

[drowninginflori]

Thanks for the info! I had hoped as much but we are new to the process and were not sure.

[EveryDayAdam]

it also really depends on your local area as well. Some trustees will ask for your tax returns...However, as long as you don't get a large pay increase, get any large cash gifts/winnings/etc., and as long as you make your payments on time, everything will be just fine!

[Flamingo]

I have seen many people post notices on the board about the fact that when you file a chapter 13 the trustee is in control of your finances for the life of your payback. I understand that the trustee will need copies of tax returns and will get any refunds that we might be owed and that they will also need verification of income from time to time (to see if our pay has changed). My question is this.....Will they be monitoring the coming and going of funds from our checking account? I understand that our finances will be scrutinized in most areas but do I need to be concerned each time I run my debit card card at a store that the debit will be questioned? I hoped that is not the case and I figured that it would be extremely hard for a trustee to keep daily tabs on each of the people who have filed in their jurisdiction but since I wasn't absolutely sure I hoped someone could explain that process to us.

Remember this when it comes to a Chapter 13; what others post on here as to what goes on in their Chapter 13 will probably not apply to you in your Chapter 13. All Chapter 13 plans are different and there is nothing cookie cutter about the process (except the emotions). When it comes to finances in your Plan, ask your attorney as you will get the advice you need for your specific plan and district. If you ask on here, you will get various different answers as to whether or not you have to provide tax returns each year and your attorney will let you know what you need to report financially during your Plan years. There may also be wording in your Plan paperwork when confirmed as to all this also. The main thing during your Plan and the best advice anyone can give you is to never be late with your Chapter 13 payment nor any other bills during your Plan. If you feel you cannot make a payment or cannot pay other due bills, contact your attorney immediately.

[drowninginflori]

Thanks everyone for great responses. In our last meeting with our attorney he did say we would need to provide tax returns so I am assuming we will lose our refunds each year. We do not expect to much else to change so I guess we will wait and see what happens.

[MOMof3]

We provide our tax returns, but we don't lose our refunds. Ask your lawyer about that, giving up your refunds is not a given.

[chloe0724]

And don't forget, you can always adjust your witholdings so you don't get a tax return.

[kornellred]

Trustees don't get any extra compensation for nit-picking. They are generally way too busy to examine a debtor's spending habits in detail.

And trustees are only going to get busier for the foreseeable future. (!)

[Flamingo]

Trustees don't get any extra compensation for nit-picking. They are generally way too busy to examine a debtor's spending habits in detail.

And trustees are only going to get busier for the foreseeable future. (!)

Thinking along those lines can get one in trouble during a Chapter 13. You are talking three to five years of being under a Trustee's control. Trustees do have staff to assist them and you can bet the size of the staff will increase along with the filings...Also, it doesn't take much to request tax returns once a year and the Trustee can request any financial or related information/documents at any time from a debtor. We used to get a letter from our Trustee every year reminding us to send in our tax return copies (they had to be submitted within five days of filing - both state and federal).

[itneverends]

And don't forget, you can always adjust your witholdings so you don't get a tax return.

As with most things on a Ch13, that is not 100% true. My trustee stated we could not adjust withholdings without permission.