Trying to collect my tax refund

[boomerkae]

Chapter 7; discharged; currently determined to be an asset case.

After not hearing anything after our discharge for a while, we finally heard from our attny late Friday night. The law ofice that the trustee hired (which he is a member of, oh the irony!), has determined that they want our tax refund. We received the money in Feburary, filed in April. The funds were used for moving, college expenses for husband's daughter, and general living expenses. None was exempted because it was used.

Can they really ask for that? It was a good amount; and of course, they want payment in 15 days. They also want more info on the property issue we have, but I'll make a separate post on that.

[AngelinaCatHub]

The property issue is probably most important. Right now not showing that money on forms or accounting for it has wet the apatite for a closer look. It is possible that the Trustee could open your case back up. You may get a (I forget the number) I think like 702 lawyer inquiry. It's kind of like a deposition as to what you did with the money. Anyway unfortunately you have opened an interest in your case. Get your lawyer into explaining this to the Trustee to his satisfaction, fast. 'Hub

[boomerkae]

I'll create the post on the property issue now - that all was disclosed as part of the filing. We didn't exempt the tax money because it was received and spent prefiling. It's mainly the property thing that has an open/asset case at this point.

[AngelinaCatHub]

OK, that is a relief. Property was what I was seeing as a problem. We had that problem in that we held a mortgage deed on sold property and were too ignorant to declare it. Didn't know it was an issue or even an asset. We were into selling it before and through our filing. We got to buy it again as the proceeds went to preferential payment to my son in law and god daughter. SO, you see, we are the poster children of what to do wrong in BK. This is why we now have learned so much as we were so ill informed by our lawyer. So much so that our Trustee worked with us, the UST did not even get involved and it did cost a a bunch. This may be your problem but not to worry. You have this forum. We did not know of it at that time. 'Hub

[LadyInTheRed]

Since you spent the tax refund before you filed, I don't know how the trustee can get it unless they are claiming that some of the spending constituted a fraudulent transfer. Is it possible the trustee considered the payment of your step daughter's college expenses as a gift to her?

Another possibility is that it has something to do with the Chap 13 you filed in December. That refund was an asset as of your Chap 13 filing in December. I don't know enough about serial filings to know if the fact that the refund was your asset at the time you filed the Chap 13 could give the trustee some right to go after it in a 7 that was filed so soon after the 13. Maybe somebody else knows.

Your attorney should be able to explain. If the refund was for 2010 taxes, it could be that the trustee saw the refund on your tax return and assumed you received it after filing the Chap 7 since most people don't file their taxes early enough to receive a refund in February. If that's what is going on, a simple call from your attorney to the trustee should clear things up.

[boomerkae]

THanks, LadyInTheRed. That's what I'm hoping. My lawyer isn't very good with details, he said it if was received post filing, they could ask for it if we didn't have the exemptions. I told him it wasn't; now he wants the date of the return and what we spent it on; I already provided that a few months ago, but will again.

[lotsahats]

Please keep us informed as to why, if you don't mind. This issue is a bit of a concern to me.

[boomerkae]

Please keep us informed as to why, if you don't mind. This issue is a bit of a concern to me.

Sure thing. I provided my attny the date we filed, the rough date we received the refund, the date we deposited, and expenditures. He replied that it was subject to the case then since we didn't exempt any. Then I realized he may have mistaken the 'filing' date I reported for filing of TAXES as the filing date of our case. So I quickly emailed him back, and clarified. He said he was going to report back to the trustee's attny office, and ask for continuance as he was going on vacation and any other attny in the office may help while he was out.

So we'll see....