tax refund?

[amytromp]

we will be getting a tax refund soon about 6,000, we are filing chapter 7 soon. we where planning on spending the money on clothes, shoes car repairs,home repairs, etc. this is greatly needed due to the fact that we have 5 kid sand no money. do anyone think this will be a issue? should i wait longer ? any suggestions?

[mom2crazies]

I was just told by my attorney today that the trustee has the right to take the tax refund (less any amount owed in taxes) as part of the estate. (Note: I am in UT and it is a "creditor friendly" state with no wildcard.)

[daylate]

we will be getting a tax refund soon about 6,000, we are filing chapter 7 soon. we where planning on spending the money on clothes, shoes car repairs,home repairs, etc. this is greatly needed due to the fact that we have 5 kid sand no money. do anyone think this will be a issue? should i wait longer ? any suggestions?

From what I understand, if you get it and spend it on essentials like you listed you are ok. Just make sure the money is spent before you file.

[tcreegan]

Hi all,

The rule is 'get it, spend it' Put it toward legit expenses (no trips to Vegas) and document where it went.

Here is the logic:

If you receive it before the BK, it is not something earned but unpaid. Worst case scenario is the UST wants to include it as income on the means test.

If you receive it after you file BK, it was earned and unpaid (owed to you) at the time of filing.

The 2010 tax refund was owed to you on Jan 1 If the IRS hasn't "paid" you, the refund is earned but unpaid and the trustee gets it minus any exemption.

If you get your 2010 tax refund from the IRS, it is paid. The trustee doesn't get it. ...well unless you buy a house in the Bahamas...

Now mom2crazies, I don't think it is the state of Utah that you have to worry about....apparently your trustee is a nut-case, right?

Well, good luck to all of us!

Tom in Colo

[mom2crazies]

Ha ha! Yes!

I really WISH it wasn't disrespectful and wouldn't get me in trouble if I asked him when he last took his medication and if he had scheduled his monthly visit to the state hospital at the 341. (This is part of the reason why my husband will be duct taping my mouth shut during the meeting). Lordy - I have a feeling I'm gonna have a good post after this meeting...

[daylate]

[QUOTE=tcreegan;501382]Hi all,

The rule is 'get it, spend it' Put it toward legit expenses (no trips to Vegas) and document where it went.

Here is the logic:

If you receive it before the BK, it is not something earned but unpaid. Worst case scenario is the UST wants to include it as income on the means test.
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That would seem like double dipping on the Trustee's part because the income in the means test is gross income which already includes part of the withholding which led to the refund. No?