Trustee still has Tax Refund after 10 months

[Annek]

I filed Chap 7 in July 2009 was discharged with no assets in Oct. 2009.

Recevied a $3000 tax refund for 2009 in Feb. 2010 which went directly to the Trustee. Claim filing to creditors went out in April 2010 with a due date of July 18, 2010 (90 days) and Oct. 18, 2010 (180 days for govt filings). State of MN errouneously sent property tax refund to Trustee in Sept. 2010 when they are still owed $400.

As of today, Dec. 9, 2010, the Trustee has not dispursed any of the cash nor will she return phone calls or emails.

As far as I know, only one creditor has filed with the BK court from the forms she sent out in April 2010.

How long does a Trustee have to dispurse the funds? And can I file a complaint against them for not doing their job in a timely maner. What should I do next?

Thanks.

[frogger]

What does your attorney say?

[Annek]

You'll love this. They said that since this Trustee's first priority is their law practice, that the BK Trustee work gets put on the back burner and they do it when they get around to it and there is nothing I can do about it. And also pretty much said, I am done with your filing so you need not call me anymore regarding your case.

[daylate]

I'd report them to th estate bar association-if nothing else just to tell them to go "jump in a lake" if you know what I mean

[BKlooker]

i'm with daylate....this sounds like your attorney is too lazy to try n do anything about it. I would call another law office or two and see if any other lawyer can give you some free advice on how to handle it. Perhaps they could at least send a certified letter inquiring about the matter for a fee (not a lawyer, so not sure)?

[Annek]

The one Creditor that filed is a creditor that I am still paying for a vehicle. So I am hoping that some of that money will go to them to lower my balance as well as the State taxes being paid to lower my balance on that too. I am paying on both of these monthly and if the Lazy Trustee would get off her butt maybe I could benefit from me tax refund a little. Even if I don't, she should not be able to keep the money. I have alreday emailed her and told her that I was going to file a complaint with the US Trustee if she couldn't finish it in a reasonable amount of time. But I am not sure if I can even do that.

[drowning123]

I don't quite understand the tax thing. My trustee never asked if I expected a refund in 2010. My prior tax returns showed that I got a refund every year. What is this thing about trustees taking tax refunds?

[BKlooker]

My 341 is in about 10 days. My tax refund is around 6K (expected). My lawyer is advising me not to worry with exempting it or anything since 1) my wild card exemption is still totally open, and wild card in my state is exact 6K, so they won’t hold my case over because they know I can just update the paperwork and exempt it , and 2) apparently in my state, trustees don’t start poking about refunds until about February, and only in cases where the amount of unsecured debt is through the roof (in excess of 100K) and the refund is large enough to make a dent in that….

My lawyer says it just happens that we tend to have ‘refund friendly’ trustees who just don’t want to go through the trouble if it’s not a lot of money and really worth the time. I think it’s just one of those things that varys from state to state and trustee to trustee. In some places, it’s standard practice to take it, both the current years and next, and in other places it’s rare. Just depends.

[BKDebby]

I don't quite understand the tax thing. My trustee never asked if I expected a refund in 2010. My prior tax returns showed that I got a refund every year. What is this thing about trustees taking tax refunds?

Drowning, I think you're in the clear.

But I had my 341 on November 10. I usually get a Federal tax refund of approx. $1200 each year. My no asset Chapter 7 is now an asset case only because of my refund. (Which I am trying to avoid now as I've changed my withholding amount, but it's probably too late to do any good).

[daylate]

BKDebby-As a possible strategy to not lose the refund if you have an IRA you could consider converting it to a Roth-or at least the portion that would eat up the refund-no one seems to know for sure if this is would cause income for the means test but the prevailing thought is that it wouldn't, it would just be considered a change of form of an asset that generated taxable income.Interesting strategy if the refund is going to the trustee.

[tcreegan]

Hi all,

The tax-refund thing seems to be trustee dependent; ours never asked about it, one poster said the trustee announced to the whole room that she was taking everyones tax refund.

...I guess the saying 'your mileage may vary' applies...

Tom in Colo