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Expected Tax Refund, what is smartest way to protect it in chp13 filing?

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    Expected Tax Refund, what is smartest way to protect it in chp13 filing?

    I didn' paid mortgage entire year last year(2009) and therefore didn't get any tax refund... But this year, my loan got modified and started paying my mortgage again and therefore expecting some tax refunds at the end of the year... I'm also in a midst of providing assets to the atty I'm working with for chp13 and now I get stuck on how to calculate my expected tax refunds... Any tools you guys know that you can share with me on how to estimate tax refunds? Also, what is best strategy to protect this tax refund(if any) from being taken by trustee to pay your unsecured? My understanding from my atty is my plan will only cover my car, trustee admin and atty fees and nothing will go to unsecured like credit cards... I would love to hear from you all great people at bkforum and I will really appreciate it...

    #2
    TurboTax has a pretty good free tax estimator on their site.

    Filed pro se, made it through the 341, discharged, Closed!!!

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      #3
      From everything I have read here in my short time here -- Trustees can request tax refunds - it is their decision. Your attorney is incorrect as any disposable income you encounter during your 60 months will be paid to un-secured creditors - so if your Trustee in your district requires you to surrender your tax refund, it will be disbursed to your un-secured creditors.
      Chapter 13 Filed November 10, 2010 Indiana - Southern District - United States Seventh Circuit
      Attended 341 hearing 12/15/2010

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        #4
        Ask your attorney if you can exempt the 2010 refund using the wildcard exemption. You may need to adjust your deductions on your schedule J to show lower withholding to reflect your actual ongoing tax liability, which will increase your income available for your plan payment. I don't know what CA district you are in, but my confirmation order in the Northern District did not require me to turn my tax refunds over to the trustee. That could be because my state refund usually just about covers what I owe to the IRS.
        LadyInTheRed is in the black!
        Filed Chap 13 April 2010. Discharged May 2015.
        $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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          #5
          CA has a very generous wildcard exemption. You can use it to exempt future tax refunds. We did, not that we actually expect a refund, but we didn't have any other use for the exemption, so the attorney figured we may as well use it for the tax refunds just in case, lol.
          Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
          0% payback to unsecured creditors, 56 payments down, 4 to go....

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            #6
            thanks guys for the good advise..

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              #7
              I live in Nebraska and hubby & I usually get a small refund. We have asked our attorney twice (for clarification) if we can keep it and were told emphatically yes we can. Does it vary state to state then?

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                #8
                Originally posted by Thor View Post
                Does it vary state to state then?
                Yes, being allowed to keep all or part of your tax refund while in an active Ch 13 varies from trustee to trustee and from state to state. There's no consistency at all. Each Ch 13 filer has to ask his/her lawyer what to expect with his/her trustee.

                Ch 13 is a great time to reconsider using Uncle Sam as a no-interest savings account. If your trustee is one that takes all refunds, then that makes it doubly important to keep as many $$ as possible throughout the year by adjusting withholdings (if your trustee allows that - some don't).
                I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

                06/01/06 - Filed Ch 13
                06/28/06 - 341 Meeting
                07/18/06 - Confirmation Hearing - not confirmed, 3 objections
                10/05/06 - Hearing to resolve 2 trustee objections
                01/24/07 - Judge dismisses mortgage company objection
                09/27/07 - Confirmed at last!
                06/10/11 - Trustee confirms all payments made
                08/10/11 - DISCHARGED !

                10/02/11 - CASE CLOSED
                Countdown: 60 months paid, 0 months to go

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                  #9
                  file your bankruptcy after you recieve your refund

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                    #10
                    We filed in April this year. We're interested in next year's refund, small tho it will probably be. Our attorney says no one will take it.

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