Do you think the trustee will work with me to pay off the tax return that I kept after making my last chapter 13 payment, or do you think she will only give me the 2 months I am given before my case is dismissed?
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Was the tax refund you received pretty big or just a few hundred dollars? I don't have the answer to your question (sorry), but with all due respect I see this question pop-up a lot on this forum and it kind of surprises me that a lot of people go through either ch7 or ch13 proceedings and are concerned with this. Most of us are forgiven a huge sum of debt in either chapter, so I will gladly give the trustee my $500 federal tax refund. I will be filing a ch13 in the coming months before the deadline and if I have to sweat for 3 years paying 20% or my 60k in cc debt and get granted a discharge putting this mess behind me they can take all the tax refunds they want for 3 years.
Just my 2 cents...
Good luck to you. -
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When I went into this, I had a student loan that I understood would be in deferral until my case was completed. Since only 2 debts were secured and 4 debts were priority, she went on to pay the student loan when those were paid. Otherwise, the unsecured debts would have been paid by about 75% and most everything would have been paid by the time I was through. My tax return was for 1800, which is a large sum to me.Comment
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That's understandable, $1800. My situation is much different. Most of my debts are unsecured, so they are welcome to my refunds of apprx $1500 for the next 3 years since I "should" be forgiven about 40k by the end of my plan.Comment
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Perhaps, but you may have to amend your plan and contact the Trustee ASAP.Originally posted by catzy
When it comes to unsecured debt in a chapter 13, your duty is to pay all your disposable income into the plan for at least 36 months, and guess what, your tax refund is considered disposable income. So even though your plan proposes a certain percentage, its implied in most plans that your tax refunds (if any) will be added to the plan.
So for example, lets say you have $50,000 in unsecured debt, and you pay $200 per month into the chapter 13 plan. Thus, your "estimated" plan payments are $7200. (the trustee gets 10%). Thus, your creditors will get roughly 13%. However, that amount is subject to upward revision based on your tax refunds.
No offense, but you screwed up and risked your entire benefit of the Chapter 13 over a tax refund. Get in touch with the Trustee, and propose a plan amendment to make up the Tax Refund that they were entitled too.Comment
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taxes
That's strange. I have never had to turn over my tax refunds. Does it matter what state you live in?Comment
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I was wondering about this, too. 2005 was the first year we filed taxes while in BK. Filed BK in Oct. 2004. Before we did our taxes we asked the lawyer about refund and they said we didn't have to do anything special. Our accountant said the same thing. Am I missing something?Originally posted by worriedjai guru deva om--nothing's gonna change my world...Comment
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I filed chapter13 in Dec 2004 and my lawyer told me to file my return by mail, just don't do electronically and we could keep our return.
I would die if I had to return mine. I'm in Tennessee if that matters.Comment
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We filed electronically and were still were able to keep our return. Weird. Illinois here.Originally posted by Peeveejai guru deva om--nothing's gonna change my world...Comment
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It just depends on the Trustee and the amount of refund. You are required to send a copy of your Tax "Return" to the trustee, and if the trustee want's the refund, they usually just intercept it, (which why they don't want it electronically filed). Also, it depends on state exemption law, some states and the federal exemptions have a wild card exemption that usually can cover a tax refund, other states don't. If there is no wild card exemption, and the refund is substantial enough, then it will have to be turned over as disposible income.Comment
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