Filing Chapter 13 Tuesday, A few last minute questions.....Advice Appreciated

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Any income tax refunds you receive, the Trustee takes while you're in Ch 13. Income tax refunds go into the plan. But the only way it reduces your time in the plan is if you're in a 100% payback plan to start. Otherwise, it's just extra money the Trustee gets to distribute to Creditors. And to line the Trustee's pocket as well, of course.

Same thing with inheritances, lottery winnings, you name it. Any kind of financial windfall you get while you're in an active Ch 13 plan, the Trustee will take. Until, you get to the 100% of debt payback level. The Court is not gonna take more than you owed total when you filed.

You can adjust your withholdings somewhat to increase your Net and decrease your income tax refund. But either way, the Trustee will get a piece of the money. One way, it's all at once. The other way, it's a little each month.

At the 341 meeting, they said if you have a tax refund greater than 1K, they want to know about it and they will want the amount over the 1K. So, with a little planning next year, I will make sure to adjust my exemptions. Due to all my gambling and state tax payments in 05, I will have no idea where I'm at this year until the end of the year. I do not plan on making any adjustements to deductions at work just yet because I have a feeling when they add my state return back into the equation for 06 taxes, I'll end up oweing federal some money.