Annual Statement of Income and Expenditures

[muneco]

We filed chapter 13 last summer. Today I received a letter from the trustee requiring us to file with the court an annual statement of income and expenditures pursuant to 11 USC 521(f) (4) (B) which reads as follows:

(f) At the request of the court, the United States trustee, or any party in interest in a case under chapter 13, a debtor who is an individual shall file with the court—

(4) in a case under chapter 13—

(B) annually after the plan is confirmed and until the case is closed, not later than the date that is 45 days before the anniversary of the confirmation of the plan;

a statement, under penalty of perjury, of the income and expenditures of the debtor during the tax year of the debtor most recently concluded before such statement is filed under this paragraph, and of the monthly income of the debtor, that shows how income, expenditures, and monthly income are calculated.

The letter states, as a party in interest, the trustee is making the request for the statement. In this jurisdiction we are also required to submit a copy of our annual federal tax return and we did so.

The letter from the trustee leaves me with several questions I am hoping others on this forum can help answer and/or clarify:

1. Is it common practice to receive a request from a party in interest to file with the court an annual statement of income and expenditures?
2. Is the term “expenditures” referring to the expense categories listed on schedule J when we filed our petition/plan last summer? Or do we have to account for every penny we spent?
3. Is the year considered to be the 12 months since our case was filed or is it from January to December 2015?
4. Is there a specific form or format for the income/expenditures that needs to be submitted to the court?
5. Since the statement has to be submitted directly to the court does it have to be done electronically or can it be mailed?

Our attorney is out of town for the whole week. I really don’t want to have to talk to him as he charges for all post-confirmation meetings. I am sure he will charge a hefty fee to prepare/submit the statement if that is the only way to accomplish it.

I would appreciate any assistance any forum members can provide. Thanks!

[justbroke]

1. Is it common practice to receive a request from a party in interest to file with the court an annual statement of income and expenditures?

It is not a "common" practice. It may be more common in Chapter 11s and Chapter 13s where a "creditor" (party in interest) may request annual statements so that they can make informed decisions about the case. Since this is from the Trustee, perhaps the Trustee received your income tax return and found more income, but see my response at the bottom regarding operating a business.

2. Is the term “expenditures” referring to the expense categories listed on schedule J when we filed our petition/plan last summer? Or do we have to account for every penny we spent?

It would typically be by category on Schedule J for "expenditures".

3. Is the year considered to be the 12 months since our case was filed or is it from January to December 2015?

It's annual based on the prior Tax Year and this is typically requested around tax time.

4. Is there a specific form or format for the income/expenditures that needs to be submitted to the court?

You should probably speak with your attorney on the form and format. Your attorney may just refer the Trustee to your tax returns.

5. Since the statement has to be submitted directly to the court does it have to be done electronically or can it be mailed?

Again, do this through your attorney. Your attorney is required to file everything electronically.

Are you operating a business while you're in Chapter 13? Did you income change (increase) since you filed? These are the only things, I think, would likely trigger the Trustee to demand an accounting under 11 USC 521(f)(4).

This is a case in which you need to rely on your attorney. In my District, in Florida, this is not common unless the person is operating a business.

[muneco]

Are you operating a business while you're in Chapter 13? Did you income change (increase) since you filed? These are the only things, I think, would likely trigger the Trustee to demand an accounting under 11 USC 521(f)(4).

No, we are not operating a business. Our only sources of income are a government pension and social security.

Perhaps the Trustee received your income tax return and found more income,

The tax return reflects our government pension and social security income. However, on the schedule J filed with our case the monthly social security is shown but is not counted as disposable income.

Perhaps the person reviewing last year's tax return did not realize that fact.

Thanks!

[justbroke]

Perhaps the person reviewing last year's tax return did not realize that fact.

That could explain the issue. Your attorney may just send them a letter to refer to the tax return and that you have Social Security income which is not "monthly income" for purposes of the means test.

[muneco]

@justbroke: Thanks for your clear answers to my many questions. It is truly appreciated!