$6000 Tax Refund

[yeahdischarged]

Oh, I'm sorry - definitely not a puppy hater. Have 2 dogs myself. I thought you said you would buy puppies. That is just definitely not something that is a necessity. But vet bills, checkups - absolutely. We are allowed to keep our pets healthy! So many of us spent literally years struggling before we finally filed, so think hard - what have you put off? Dental, medical, eyecare, automotive, legitimate home repairs (not basement remodels), car tires, gosh it's hard to think now, but what have you not even considered while you were trying to make it day by day? That's the kind of stuff you are allowed to do.

Sometimes I guess I do come off blunt, we went through the wringer and back with our experience. Anything I can do to help you avoid that I am willing to do. Rather you hear something you don't like from one of us "survivors' than from a Trustee in a negative situation!! lol We all mean well, trust me, or we wouldn't spend time here after our discharge. The emotional support and advice I got here and other boards is the only thing that kept me sane while we were going through it.

My lawyer told me that in some districts, it is a given that the trustee will take your tax return ( period) and in others, they never take it. So it helps to have a knowledgeable attorney who has a good relationship with the Trustee's in your district.

Either think like a Trustee, check with your attorney, or better yet - both! lol

Good luck everyone!!

[lillaimof2kids]

Last year we filed our taxes before we filed BK7. Our tax return was spent on teeth cleaning for the kids, new glasses for my husband and daughter, 1/3 side of beef, stocked up on food at Sam's club/grocery, a couple mortgage payments, caught up on all bills we were behind on (electric, gas, phone...no CC's or anything like that), a couple outifts for the kids, 2 health insurance premium payments, auto oil changes. It was all things we needed. None of the money was wasted on questionable stuff. I talked to my attorney before we spent a penny. I saved receipts for everything!! We didn't file until all the money was spent.

[mgmadara]

I think yeahdischarged gave some great advice and I don't think he/she sounds like a puppy hater at all. The trustee will want to see how the income tax refund was spent so it's not a good idea to spend it on things that aren't necessities, like puppies. If it were me I would wait until after discharge to get the puppies and spend my tax refund on things like car repairs, food, medical/dental, house repairs, etc. The less the trustee has to question, the better.

[Over our heads]

FWIW, I never said buy puppies.
I said get your pets any medical care that you had been putting off.

It is only our unusual tax situation that is allowing us to get puppies now, and have the money needed to keep them safe, healthy, and unable to procreate.

If you have debt that you could pay that is allowable to do so w/o being considered preferential, by all means do so.

I am a woman, and will even admit that I might be a tad hormonal today, but Yeahdischarged, you came off to me as a puppy hater.

I'll go take a nap and some pamprin now.

[wonkettegirl]

Get your car repaired, including new tires. When was the last time you bought a winter coat? Boots, hats, gloves? Do you need dental work? How about stocking your pantry with nonperishables and your linen closets with new sheets, as much toilet paper and cleaning product as it can hold? I did these things to spend down the money I had been paying toward my mortgage, and it was DIFFICULT. I was NOT used to having any $$ to spend, and it felt very strange.

But making my car winter-safe is a legitimate expense, and I don't feel bad about it anymore. Buying my kids good, sturdy coats was something I always wanted to do. I didn't buy myself a coat because I didn't need a new one, but I did buy some boots. I got winter clothes for my kids and stocked the pantry and closets.

[yeahdischarged]

Look at is this way: Had you adjusted your withholding properly to be breaking even, you would have had $500 more a month coming in to your home. What would that $500 a month (6000 divided by 12 months) done for your personal finances? Would it have helped you avoid bankruptcy, pay some of your bills off, etc.? That's how the Trustee will look it.

Sometimes it wouldn't have made a difference, but still that money is the estate's money unless you are able to exempt it. I wouldn't buy puppies with it. I would focus on things like - medical or dental work you have put off, car repairs (not optional things), etc. I had a friend who had received the insurance money (from a storm) to replace their roof but had never done it (because they never had the extra money to add to the insurance money), so they did in fact do that. Trustee was fine with that. House repairs, eye care, dental care, medical care, etc. If you have extra money to run around and buy optional items (puppies, etc.) then couldn't that money have been used to pay some debt?

Again, think like a Trustee unless you are able to exempt your tax return.

And in the future, adjust your witholdings so you neither owe nor get a refund. (Why give the government an interest-free loan all year?) Let that extra money per month help you get back on your feet!

I know there are people here who get testy with the information, but that is neither here nor there. You are absolutely allowed to have the government hold your money all year and get a huge refund UNTIL you need to file for bankruptcy and are not able to exempt the refund. Then it becomes the Trustee's business how you spend it.

Good luck.

[Over our heads]

Get your refund, pay your attny, spend the rest, do not under any circumstances give any to your aunt, and when it is gone, then file.

I hounded our attny just yesterday about what to do with our refund. IRA's are exempt here, so we will start one, nothing exorbiant, but whatever we can't resonably spend will go there.

We plan on keeping our home, and will probably have it painted inside and out. It is considered upkeep, and if you could see my walls, you would understand! We plan on taking both of our vehicles in for major tune ups. While mine won't need much as it is 3 yrs young, dh's is pushing 100k miles and we need it to last at least until mine is paid for in another 3 yrs or so.
Do you need glasses or contacts? If so, get them. Contacts, get an entire years worth. Glasses? Get 2 pairs. I get an inside pair and a pair of sunglasses.
Stock up on as much household necessities as you can store. TP doesn't expire as far as I know.
Have pets? Been putting off vet visits? Get'er done!
Due to the larger than normal refund we are expecting, we are actually getting puppies sooner than we had planned on (next year) as that will help us get through a good chunk.
Most meat will keep for 3 months well wrapped in a freezer. If you don't have one, start asking on your local freecycle!
You can freeze just about anything.
The key here is if you have it in your account, or file before it is spent, it is considered an asset and whatever amount you can't exempt is up for the taking.

I would definitely change banks.

[magyar123]

OK, what if I file my tax return electronically on 1/19, and my BK on 1/30? I will also be asking the IRS for a check because I am afraid Discover will jack my checking acct again. Is it the dates of filing that matter or when I actually receive my refund?

In order to prevent Discover from jacking your checking account again, just close your current checking account and go with a completely different bank.

[okiemom2008]

Colorado... My Atty did mention he was hoping to wait for my tax return to go through.

This is so bass ackwards... MAKE someone who's broke spend a few bucks that could get them through a couple months, or they lose it. UGH!!!!

New tires & wheels, a visit to Costco for a couple mos groceries, 50K car service at the dealer, have them replace the exhaust that's falling off, prepay my car insurance, maybe some good tequilla while I am at it. Jeez, what a crock!

Whatever you do don't pay back a relative or friend! They will go after them for the money and you will lose it.

I was told to buy things like clothes, groceries, tune ups on vehicles, or put into an IRA(if your state lets you exempt them)

Wouldn;t it be nice to save it? lol

[danaf]

I don't see that CO allows any cash exemptions so yeah - spend it on stuff you need.

[BillyRip]

What state are you in? Have you checked yet to see if you can exempt any money?

Colorado... My Atty did mention he was hoping to wait for my tax return to go through.

This is so bass ackwards... MAKE someone who's broke spend a few bucks that could get them through a couple months, or they lose it. UGH!!!!

New tires & wheels, a visit to Costco for a couple mos groceries, 50K car service at the dealer, have them replace the exhaust that's falling off, prepay my car insurance, maybe some good tequilla while I am at it. Jeez, what a crock!

[danaf]

What state are you in? Have you checked yet to see if you can exempt any money?

[BillyRip]

You need to spend it before you file.
Things like food, car repair, your attorney. Needs not wants.

Yeah, I figured.... How about home improvements like finishing the basement in the town home I want to keep?

Can I throw it into an IRA or anything like that?

[momof3b1g]

OK, what if I file my tax return electronically on 1/19, and my BK on 1/30? I will also be asking the IRS for a check because I am afraid Discover will jack my checking acct again. Is it the dates of filing that matter or when I actually receive my refund?

You need to spend it before you file.
Things like food, car repair, your attorney. Needs not wants.

[BillyRip]

If you file BK before you file your 2008 tax return the Trustee will want your refund, UNLESS you exempt your refund in your petition.

You can not pay your Aunt prior to your filing BK. If you do it is considered insider payments and the look back period is ONE YEAR for insider payments. The Trustee can go after anyone (insider) that you paid to get the funds or make you pay the funds to the Trustee.

OK, what if I file my tax return electronically on 1/19, and my BK on 1/30? I will also be asking the IRS for a check because I am afraid Discover will jack my checking acct again. Is it the dates of filing that matter or when I actually receive my refund?