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    Tax return stuck..

    So, I filed my tax return the moment my W2 showed up, on 1/23/19. I fully understand that my trustee is entitled to 10 months worth of my tax return and I don't mind, I just want this thing behind me. I've called the IRS a couple times now, my refund is being held by the IRS because of the bankruptcy. I can't get them to send it to the trustee either, it's just sitting there. Is the trustee supposed to request it?

    I let my attorney know, he said not to worry about it, but, that was over a month ago. My case is still open, so it's not like the trustee just decided not to take it. Bankruptcy discharged over a month ago and my tax return has been ready since 02/05 just sitting at IRS waiting. Is this pretty typical or should I be more proactive? I don't want to get in any trouble, but, don't want to rock the boat either if my trustee just doesn't care enough to request the money.

    #2
    I don't think you'd get in any trouble, it's a good question, and it's your refund after all. Does the IRS say why the bankruptcy is holding things up?

    Comment


      #3
      Call the IRS Insolvency Department and ask the reason for the hold. It could just be because the bankruptcy is too "new" and they don't know what to do. Do you owe back taxes?
      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


      I am not an attorney. Any advice provided is not legal advice.

      Comment


        #4
        So, the answer was that IRS was holding the refund check waiting to see who to send it to. I don't know if my trustee didn't file the right form or what, but, I finally got the bankruptcy line back in April and they were able to find who my trustee was and mail the check to them. It's just too bad it was a waste of two months for no reason. Then of course, the creditors all got a window to file claims. Last day to file claims is July 5th. There are tons of claims, even my current student loans claimed, which I thought was strange. There are even claims from companies I never did business with- it seems strange that any company would buy bankrupt debt- but, apparently there are some collections agencies scummy enough to do so.

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          #5
          There are plenty of companies that buy "portfolios" of bad debt which may include debt included in a bankruptcy and/or subject to a bankruptcy discharge. These large junk debt buyers (JDBs), as they are known, buy these multi-million dollar portfolios for literally less than 5 cents on the dollar, and sometimes a lot cheaper. If they can just collect $0.02 (two cents) on the dollar then they, on average, can make money. Just because debt, which may be subject to discharge in a bankruptcy, is included in the portfolio, doesn't stop these JDBs from filing claims. (They can technically only file a claim on debt that has not been discharged. Some have paid hefty sanctions from bankruptcy courts by trying to collect on discharged debt.)

          That's literally their entire business model. Debt subject to discharge can actually be more profitable. While 95% of Chapter 7 cases produce no assets from which a claim could be based, there are 5% that are entirely worth it. Chapter 13s can be especially lucrative because there will be "some" payment to the unsecured creditors.
          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


          I am not an attorney. Any advice provided is not legal advice.

          Comment


            #6
            Will my student loans get priority for their claim? I'm still paying them because obviously they aren't dischargeable anyways. I don't owe much at all, but, I suppose it's wishful thinking that my loans will just be paid in full from my tax return.. lol My tax return was big enough to pay my student loans in full, just surprised they filed a claim since they aren't dischargeable.

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