what is this about trustee taking ur tax return

[bearchicky]

i live in illinois,cookcounty.
noone ever said my trustee was gonna take my tax refund.
is that just in certain states?

[willowhare]

I'm in IL too

I haven't filed yet (hopefully ch. 7) but here's what I understand:

Under the law, a trustee is entitled to take the tax refund from the year in which you filed bankruptcy. Depending on when you filed, they may be entitled to only a portion of it.

For a chapter 7 case, that is usually the end of it.

Now, in a chapter 13, they may be able to take it every year that you are in a repayment plan. That money is then distributed to your creditors. The good news is, this may help you pay off your plan sooner than you thought. The bad news is, well, they take your money.

Search around this site and especially the Ch. 13 forum for more information. If you filed with an attorney, you may want to call them, too.

[Mi Bankruptcy]

If you have plenty of room left over in your exemptions you can exempt your refund. Here is what I had our attorney do. He said don't worry about it.. This Trustee doesn't typically take your refund( for our state and district). I told him to exempt it anyway.

We are CH7 no asset with plenty of room left in our exemptions.

Schedule B
Anticipated 2008 Tax return $6,000

On Schedule C We listed:

We put "Anticipated 2008 Tax Return"
(Husb)11 U.S.C. 522(d)(5) $3,000
(Wife)11 U.S.C 522(d)(5) $3,000

[justbroke]

i live in illinois,cookcounty.
noone ever said my trustee was gonna take my tax refund.
is that just in certain states?

For a Chapter 13, some Trustees consider any money left over, and refunded as part of your tax return, to be "Disposable Income". You will need to increase your number of exemptions (using a W-4) so that you don't have too much withheld.

While this may differ from State to State, it is generally accepted practice amongst Trustees in all States. When you receive/received your Order of Confirmation it should contain language about what happens to tax refunds. The Trustee is who actually writes the Confirmation Order, and will put all the ground rules in there, including, but not limited to, whether you can acquire new debt (or at what limit they set), what to do with refunds, how payments are being disbursed, etc, etc.