Tax refund and reduction of payment plan.

[Andyman]

I'm 2 years into my 5 year 13 plan. I'm getting about $1700 back in taxes because of overpayment. I'm self employed and business was way down last year. My plan calls for the trustee to get all tax refunds. I'm waiting for a return call to see if my attorney can petition the court for me to keep the money. I sent a letter to my trustee asking if I could keep the money and he wrote back that my attorney would have to petition the court. Anyway, if the courts says no, then will the $1700 reduce the time of my plan? My plan calls for part of the money to go to the CU for my truck and the rest goes to my attorney fees. None goes to credit cards.

Thanks!
Andy

[lrprn]

Anyway, if the courts says no, then will the $1700 reduce the time of my plan?

Unless your plan is a 100% payback to all creditors who filed claims, then unfortunately the extra $1700 will simply increase your unsecured creditors' payback %. It won't shorten your plan even one day.

[Andyman]

Unless your plan is a 100% payback to all creditors who filed claims, then unfortunately the extra $1700 will simply increase your unsecured creditors' payback %. It won't shorten your plan even one day.

None of the unsecured creditors are in my plan.

[justbroke]

None of the unsecured creditors are in my plan.

That doesn't make sense. What do you mean by that statement? Are you saying that not one unsecured creditor filed a claim, or are you saying that you're in a 0% plan?

If you're in a 0% plan with unsecured creditors, that still means that they are entitled to any "disposable" income, and the tax refund is definitely "disposable" income. The Trustee would distribute it to those hungry unsecured creditors.

If not one unsecured creditor filed a claim, the Trustee may still take it to pay your priority debt (taxes) which are still "unsecured".

[Andyman]

That doesn't make sense. What do you mean by that statement? Are you saying that not one unsecured creditor filed a claim, or are you saying that you're in a 0% plan?

If you're in a 0% plan with unsecured creditors, that still means that they are entitled to any "disposable" income, and the tax refund is definitely "disposable" income. The Trustee would distribute it to those hungry unsecured creditors.

If not one unsecured creditor filed a claim, the Trustee may still take it to pay your priority debt (taxes) which are still "unsecured".

I had 3 credit cards and a car loan when I filed. the car loan (credit union) was the only creditor that was included in my plan along with my attorney fees. The credit card companies didn't file a claim. I pay $310 a month for 5 years and have about 42 payments left. Of the $310...part goes to the credit union, part goes to the lawyer and the trustee keeps a percentage. My plan calls for me to give all tax refunds to the trustee. The first year I was able apply any overpayments of tax (I'm self employeed) to my estimated quarterlies. This past year I didn't make much so ended up with not only applying to this years estimates but also in getting refunds. Hope that helps?