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Do I have to turn over my income tax to the court

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    Do I have to turn over my income tax to the court

    can I file a amendment to keep my income taxes before my bankruptcy closes I got my taxs back a few months ago and it is already gone, my case was postponed until next month,trustee said I had to as of now. I live in the state of ky

    Thanks.

    #2
    If you have exemptions left over, then you can amend your schedules to exempt your income tax refund. Be very cautious. This is where many pro se Chapter 7 debtors mess up! They spend their tax refunds even though the Trustee indicated that they had to surrender them. Specifically, you will need to review the exemption scheme that you used (your State's or the Federal Exemption scheme), and see if a.) you have money left over in a wildcard to exempt the refund, and b.) that the wildcard actually allows cash and/or you have not exceeded any limit on the amount of cash that you can claim with the wildcard.

    From my casual glance at the Kentucky exemption scheme, you could only claim up to $1,000 under the wildcard.

    Now, back to your case. You say that it was postponed. I'm assuming that you mean that your 341 Meeting was "continued" and that you'll have another one. Additionally, if you spent all of the tax refund before filing, then so long as you spent it on reasonable things (like keeping a roof over your head, or eating, medical, commuting costs, etc), the Trustee can't "claw" it back -- so to speak. The problem may be that the Trustee is intimidating you because you are pro se. Again, if this money was spent before filing, you should not have any issues. You just would tell the Trustee that the money was spent pre-petition. ON the other hand, if you received this post-petition (after filing) and spent it, then you are probably out of luck unless the refund was very small and can fit within what exemptions you have left.

    Back to the question... do you have to turn it over. If the Trustee says you do, then you do... unless you have a valid exemption to protect it, or the money was spent pre-petition. However, from reading your post, it looks like you didn't file and receive the refund before filing. The Trustee, in this case, may be entitled to the refund.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment


      #3
      I spent mine and not on things I should have, caused me great stress. My attorney added the 1049.00 refund into my income for the six month instead of using my exemptions. Now for me that was fine because I was way below the median income. The trustee looked at the return at 341, put it back down, never said one word.

      Your trustee already seems to have his eye on yours. Justbroke has pretty much summed up what could happen (as always).

      Good luck and keep us posted.
      Filed CH 7 4/15/11
      341 5/23/11
      DISCHARGED & CLOSED ON 7/27/11

      Comment

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