paystubs request after 341? and savings question

[becky20]

Our 341 is scheduled for Wednesday. I was at the atty's office on Thursday and asked her about opening a savings account. Also had asked her about changing our deductions on our paychecks. We have gotten somewhat large refunds the last few years on our taxes and my attorney had said that after we started our plan that we could change our deductions so we get less (or no) refund - so my plan is to open a savings account and put that extra amount from our paychecks in to the savings account (automatically so it doesn't get spent). Well, it's already August. When I asked, my attorney said that occasionally the trustee will ask for paystubs again after the 341 (at the 60 day wait period). I asked what if the trustee asks and sees that we now have more on our paychecks. she said to just say that our tax person advised us to up our deductions. She also said to wait until after the 60 days to get a savings account. All this has me confused and not sure what to do. I'd almost rather wait til after the 60 days, but that means we'll still end up with a large tax refund which the trustee will take.... And it's two months left of savings, which we really need to get started on... So... What do you guys think? Should I change our withholdings now or wait til 60 days from our 341 (which wouldn't be until mid-October or later if it's delayed). If the trustee does ask for more pay stubs and see that we've changed our deductions, will that cause issues (our payment to go up or any other issues)???

UGH, with my luck, if we change our withholdings, then the trustee will ask for pay stubs, and if we don't change our withholding, they probably won't and I'll wish I had changed it now...

[becky20]

Didn't say I was going to do it, that's why I am asking. I'm asking to find out how common it is for them to request more pay stubs after the 341... And to find out if other people have changed withholdings after filing... The attorney felt it wouldn't be an issue for us to change our withholdings once we're confirmed, and other attorneys we consulted before this one also advised us to change our withholdings after, the question is when it's okay for us to do so.

[laurannm]

We are filing Ch 7 and not 13, so it may apply differently, but since ch 13 debtors have to fill out a 22C (which is identical to the means test 22A form), I am thinking it's the same. On the 22C you generally deduct your actual tax obligation, so in theory changing your withholding shouldn't really matter. On our schedules we entered in for "other income" a prorated income tax refund for this year, based on what I expected us to receive for a refund next year. Our lawyer said we would have no problems adjusting our withholdings (we too typically receive large refunds) after filing since we have already accounted for the extra money that shows on our paystubs on our schedules.

Again, we are trying for a Ch 7 and I am by no means an expert, but that is our strategy anyways

Good luck!

[ccgirl]

I had my 341 a few weeks ago. Each year I have to give a portion of my refund (any amount above the refund I got this year) to the ch 13 plan. It very clearly states that you cannot change your withholdings without consulting with the trustee. I guess I would ask the trustee. Also, is part of your plan to pay a portion of your tax refund? That might make a differenc.

[becky20]

I had my 341 a few weeks ago. Each year I have to give a portion of my refund (any amount above the refund I got this year) to the ch 13 plan. It very clearly states that you cannot change your withholdings without consulting with the trustee. I guess I would ask the trustee. Also, is part of your plan to pay a portion of your tax refund? That might make a differenc.

Where is this stated? I don't believe that it is part of my plan - the only things in my plan are our two car payments, and the mortgage payments and HOA fees that were in arrears (and of course the trustee payment's portion). my unsecureds are getting 0%.

So if they DO get my tax refunds, does my plan end early or do they end up giving $$$ to our unsecureds??

[arkienurse]

Sounds like a great attorney...telling you to lie to the trustee....see ya in prison

And just where did the attourney tell her to lie??? I have read the post several times and don't see anything jumping out at me as illegal advice. Oh, wait, you mean the part about changing her deductions?? And saying her tax person said to? Well, if she had actually asked her tax person, that is the same advice they would have given. Our attourney also told us to change our deductions, no sense in the government using our money for free when we needed it worse. In fact, I believe this is common advice, although I have never heard the bit about a trustee having an issue with it.

[PoorGrammyinBK7]

Almost ANY tax expert will advise you to claim as many exemptions as you can! Why should the government be allowed to use your money interest free? That is YOUR money. A refund is not taxes - its money you OVERPAID. Why would anyone do that?

I know some do it to "force" savings, but you could force yourself to save and maybe get a little interest paid on your money.


Sorry,I don't know how it works as far as having to get permission from a trustee/in a Ch 13, - maybe you do have to. Bankruptcy changes everything. But just wanted to agree with arkienurse on that point.


And who knows, maybe the attorney is a "tax person" too - I have known some that are, just as some are also trustees!!

[ccgirl]

In my plan in section 2 "The Funding of the Plan," it states how much I will pay and how often. The next page says, "Additionally, the debtor commits for payment in the Plan 100% above schedule I; each year of all future income tax refunds to which the Debtor is entitled during the commitment period fo teh Plan and the Debtor shall not alter any withholding exemptions without first obtaining the approval of the Trustee."


Not all plans require taxes to be paid into the plan. I think the amount goes above what I am already scheduled to pay. I think my plan has this because each year I get a raise at my job so this will be their way of monitoring the extra money. (I think)

[becky20]

My document (not sure if it's the right one I'm looking at) says my amount due for months 1-60, and under Tax Returns it says that while the case is pending the debtor shall provide to the trustee a copy of any post-petition tax returns within 30 days of filing. The debtor has filed filed all tax returns for all taxable periods during the four-year period ending on the petition date. Another document I have does say under Turnover of Future Income Refunds and Returns that the trustee may require that debtor turnover to the trustee copies of federal and state income tax returns for the year in which you filed your case and for the two years immediately following the year your case was filed. You may be required to turnover income tax refunds for the current and fugure ears for use in paying your creditors.

Since my case is paying back 0% to unsecured, wonder how that works. No mention anywhere that we need to get trustees permission to change withholdings...