HELP Please Tax Return Question

[Lawrence21]

Hello,
I have filed for CH 13 and have been paying on a 100% plan since Oct. 2020, however due to delays (covid) re-filing, mistakes ( attorney side) etc. my official confirmation was in Oct 2021 with my first new "higher" payment starting Nov 2021. I just received my Confirmation letter and it mentions the fact I must turn over any tax refunds. I was under the impression this would start once everything was confirmed so I would turn my 2021 refund (if any) once filed this year. Well it says I am supposed to turn over the 2020 refund as well. I'm scared, because money is so tight right now after doubling my payment and I don't have the refund to turn over today. Any experience with the Trustee working with you on this without dismissing my case? I haven't missed or been late on a payment yet.
Thank you
Stressed!!!!

[justbroke]

If you're in a 100% plan, you should not need to turnover any tax refunds. Something is wrong. Please speak with your attorney. A debtor that is in a 100% plan should never need to turnover any tax refund to "fund" the plan. Only those that propose a plan that pays less than 100% "must" turnover all "disposable" income to the custody and control of the Chapter 13 Trustee.

(By "something is wrong" I mean to say that something does smell right. Usually, a debtor in a 100% plan does not need to a.) submit "all disposable income" to the trustee, as it's not required by the bankruptcy code, and b.) submit any tax refunds because, again, a 100% plan debtor does not need to surrender any "disposable" income to the trustee for the plan. That's how I have always understood how a 100% plan works. But... there are many Chapter 13 Trustees and debtor attorneys that will try to get the debtor that is in a 100% plan, to do what they are not required to do.)

[Lawrence21]

Thanks justbroke! Ideas on what I should do? Challenge my attorney? Is there a law or statute I can reference?

[justbroke]

The law is plain and simple in the bankruptcy code... any debtor that does not file a plan that pays all allowed claims then must surrender all disposable income. It has always been the case. As I wrote, there are many Chapter 13 Trustees and even debtor attorneys that will say "just get it over with quicker and surrender your DMI and tax refunds" even though it is not required in such a plan. Your plan must be 100% in order to avoid surrendering any "disposable"income.

Just ask your attorney why you're surrendering tax refunds in a 100% plan which does not require such. Maybe it was an oversight in the order confirming plan (which is usually drafted by the Trustee's office). Maybe they push for this in your specific district. I just don't know.

[malissiabro]

Perhaps someone is trying to deceive you, and you don't have to reimburse anyone. Have you thought about this option, or have you forgotten about this possibility? You don't quite understand what they want from you and how you could have accumulated some monetary debt to the tax service. On XXXXXX, sometimes they write about such cases and warn about fraud. Try contacting this bank directly rather than through bank agents, and find out if this is the case. You can not give money somewhere without confirming that you are paying your debt.

[justbroke]

Perhaps someone is trying to deceive you, and you don't have to reimburse anyone. Have you thought about this option,

I don't know if you actually read the post or you don't understand what a bankruptcy trustee. I'll give the benefit of the doubt that you don't. What you post has nothing to do with claims in a bankruptcy.

[Carmella]

Do you have the paperwork from your BK that explains what is expected? Could it have been a stipulation to take the refund for a particular year since you had extenuating circumstances. Definitely talk to your attorney to find out the details. I have reported any "unexpected money" to my attorney, but have not had to turn any over as we are in 100% plan. Even when the trustee tried to up our payment due to a mistake in our budget found during the 341 meeting it was shot down since we were already paying 100%.