Question: Regarding No Asset or is it Asset when Trustee wants your 2010 Taxes?

[bkzips]

So, we received a letter directly from the Panel Trustee on Tuesday stating that he intended to distribute our Tax Refund, when received and to not delay the filing of the return.

Our 341 was on Oct 5, our last day of the 60 day wait is Dec. 6.
Pacer shows MeansNo and nothing has been updated to pacer since 341, other than our updated financial class completion.

So, the Questions:
Is Panel Trustee changing us to an Asset Case?
or
Will we still receive a Discharge with pending distribution of our Taxes?

and
Will this delay our Discharge or Close?
Can they come after any other assets past the December 6th date?

Thank you for your help.
We are getting slammed pretty hard in the final moments before crossing the 60 day deadline.

[free2breathe]

From what I understand, this will not affect your discharge. It does mean you are an asset case, and you will probably see that status change on Pacer in the future. It will also affect the closing of the case. We were told ours could take up to a year to close. He has changed us to an asset case, and we are to send him a copy of our tax return immediately upon filing, and then we are to forward our refund check directly to him. I plan on filing on Jan 6th hoping to just get it all behind us.

[bkzips]

From what I understand, this will not affect your discharge. It does mean you are an asset case, and you will probably see that status change on Pacer in the future. It will also affect the closing of the case. We were told ours could take up to a year to close. He has changed us to an asset case, and we are to send him a copy of our tax return immediately upon filing, and then we are to forward our refund check directly to him. I plan on filing on Jan 6th hoping to just get it all behind us.

Thanks free2breathe,
Do you know if during the time between discharge and close, if they can continue to make requests for assets that are accumulated? Like, if we receive a bonus between those two times, is it something the trustee could take?

I will be grateful to just get discharge and be in process of closing a chapter 7 vs being pushed into a chapter 13. So, that is what we keep saying to ourselves. That this pretty much confirms we will probably discharge a 7.

I hope neither of us has to wait a year to close...but, knowing my luck...I tend to receive the waiting side of everything I ever desire.

[backtoschool]

free2breathe is correct. Becoming an asset case does not affect your date of discharge, but will affect your date of closing. If the trustee wants your tax refund, then you are being turned into an asset case, with the the refund being your asset. Your case will be discharged at the same time it would have been discharged if you were a no asset case, but your case will not close until the trustee receives your tax return, cashes it, pays it out to creditors who file claims, and all the creditors cash the checks that the trustee sends them.

[msm859]

free2breathe is correct. Becoming an asset case does not affect your date of discharge, but will affect your date of closing. If the trustee wants your tax refund, then you are being turned into an asset case, with the the refund being your asset. Your case will be discharged at the same time it would have been discharged if you were a no asset case, but your case will not close until the trustee receives your tax return, cashes it, pays it out to creditors who file claims, and all the creditors cash the checks that the trustee sends them.

What if I was turned into an asset case by having to buy back the goodwill in my business @ $2500. I have already paid the Trustee and he sent out the Notices to file a claim with the last date of March 1, 2011. The IRS is a priority creditor and their claim will take all of the "asset". Will the Trustee be able to close the case once the IRS has made their claim and can he pay them before the March 1 deadline?

[free2breathe]

Thanks free2breathe,
Do you know if during the time between discharge and close, if they can continue to make requests for assets that are accumulated? Like, if we receive a bonus between those two times, is it something the trustee could take?

I will be grateful to just get discharge and be in process of closing a chapter 7 vs being pushed into a chapter 13. So, that is what we keep saying to ourselves. That this pretty much confirms we will probably discharge a 7.

I hope neither of us has to wait a year to close...but, knowing my luck...I tend to receive the waiting side of everything I ever desire.

Here is a bit about what you could expect to turn over if you receive it within 180 days of filing your bankruptcy petition.

11 USC § 541 (a)(5)
Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date--

(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or (C) as a beneficiary of a life insurance policy or of a death benefit plan.

Haven't found a hard and fast rule regarding bonuses. It depends on the district, the panel trustee, etc. Technically, if any of the bonus was actually "earned" prior to the date the case was filed, a percentage of that bonus could belong to the bankruptcy estate. Our trustee gave us an agreement that we had to sign in front of him giving us instructions on turning over property. Nothing was asked or even mentioned about bonuses.

[bkzips]

Thanks for posting that freetobreathe. That makes me feel better. We don't have anything scheduled, but you just never know and if for some reason the Panel Trustee drags feet, I would hate to be on the line for anything for a year plus that might surprise us.
180 days from August 31st isn't too bad.

BacktoSchool, thank you for your further confirmation. It makes my nerves calm a little. We said at the beginning, they could take anything to get us free of this old debt thats been following us for 4 years -as long as we could get it in the form of a chapter 7. That was our hope.

[tcreegan]

Hi all,

msm...the case won't close until after the claim date and after the trustee gets around to filing the final report. But case closing really doesn't make any difference to the debtor, the discharge is what is important and that should go according to schedule.

...probably going to be nice to have the IRS off your back!

Tom in Colo

[frogger]

What if I was turned into an asset case by having to buy back the goodwill in my business @ $2500. I have already paid the Trustee and he sent out the Notices to file a claim with the last date of March 1, 2011. The IRS is a priority creditor and their claim will take all of the "asset". Will the Trustee be able to close the case once the IRS has made their claim and can he pay them before the March 1 deadline?

Don't confuse closing the case with a discharge.

Closing an asset case takes some time, much like watching a snail crawl. There are series of paperwork to be done. The trustee will not close the case once the IRS has made the claim. The trustee will not pay them before the March 1 deadline.

Be patient. This is a process.....