Do I get a tax refund, if. . .

[Nursegirl62]

Hey! I am new to the forum. I owe federal taxes. They are more than 3 years old, but just filed a year ago. I am due a sizable refund this year and I have filed Chapt. 13. Will I receive a tax refund? And what about stimulus checks? After reading a few of your posts, I am not certain. Also, bankruptcy laws are federal and do not change from state to state, do they?

Thanks so much!

[lrprn]

I owe federal taxes. They are more than 3 years old, but just filed a year ago.

Then the taxes can't be discharged if you file bankruptcy. You had to have filed them at least three years ago too - then you might have had a chance to discharge them. Sorry - you'll have to find a way to pay them - I hope you put them in your Ch 13 to get them repaid that way over time.

I am due a sizable refund this year and I have filed Chapt. 13. Will I receive a tax refund?

If you owe the IRS more than your refund, then it's very likely you won't see a penny of it. It will likely go directly to your trustee who will use it to pay towards the taxes in your plan.

If what you owe is less than the refund, then whether you get any of the refund back or not depends on your trustee's practices around tax refunds.

There's absolutely no consistency across the country about how Ch 13 trustees handle tax refunds while your plan is active. Some take it all, some take part, and some don't care about refunds at all. Ask your lawyer what to expect with your trustee.

And what about stimulus checks?

There's no govt plans to issue separate stimulus checks again. Instead the stimulus is coming from reduced taxes for 95% of US taxpayers and shows up on each of your paychecks as a little extra income.

Also, bankruptcy laws are federal and do not change from state to state, do they?

The bankruptcy law is federal but mixes deeply with required state-based elements such as median income by family size, acceptable expenses for auto expenses, transportation, living costs, etc.

To learn more about how Ch 13 works, take a read through these links:

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

http://moranlaw.net/13workings.htm#Chapter%2013%20practice

[MommyMc]

We owed $1800 from last years taxes, it got rolled into the chapter 13 we filed in December. We were to get a $3300 tax refund this year.... it ALL went to the Trustee...
It's different from trustee to trustee, so talk with your lawyer....
Good luck!

[krielly]

I don't know if it's your trustee, district, state, or IRS office that varies.

I hear different responses to this all the time.

Our Chapt 13 included the IRS as a priority claim. They never held our refund, or either of the stimulus payments...............

K

[Nursegirl62]

Tax refunds and bankruptcy trustees

All of you have been so helpful. I interviewed two attorneys and both wanted to charge me over $3000 to file. I don't have that kind of money. So, I filed myself. The problem is I have so many questions. My question today is, if it is my bankruptcy trustee who will decided then is it okay to contact her and plead my case for the refund? Or is this strictly forbidden?

[Nursegirl62]

Did you inform the trustee of the expected refund or stimulus checks? Or do they just know by way of the system? Am I obligated to tell them of my expected refund???

[HHM]

Not to harp on the OP, but I think this needs to be said.

You made the classic mistake of not considering the difference between cost and price.
The lowest price is almost never the cheapest cost.

As with many debtors, you made the knee jerk reaction of, the attorney wants $3,000, I don't have it, I guess I will file on my own. First, if you are filing chapter 13, you "could" come up with it; you just don't want to, or not really willing to sit down and figure out how you would do it. You focused on the "price", not the cost. Based on your current circumstances, your chapter 13 may end up "costing" you much more than $3,000 as you try to navigate the landmines of a chapter 13. Not to mention all the time you will need to spend dealing with this...time value of money

If you owe the IRS, the IRS is supposed to send the refunds to the BK trustee in an open chap. 13 (the BK courts have slapped the IRS a few times for keeping refunds in open chapter 13's, violation of auto stay, and all that jazz). What you need to do is adjust your W-4 exemptions so you don't really get refunds (or owe) when you file your tax return. Once the taxes have been paid, what happens to any refund is district specific.

[Flamingo]

All of you have been so helpful. I interviewed two attorneys and both wanted to charge me over $3000 to file. I don't have that kind of money. So, I filed myself. The problem is I have so many questions. My question today is, if it is my bankruptcy trustee who will decided then is it okay to contact her and plead my case for the refund? Or is this strictly forbidden?

$3,000 in 2009 is cheap...we paid $1,800 in early 2002 for our Chapter 13 and were able to include part of it in our Plan. As HHM stated, Chapter 13's can be extremely complicated (especially after the new BK laws were enacted in October 2005) and most folks suggest going with an attorney to avoid costly and time consuming mistakes. After going through ours, I would not attempt to file a Chapter 13 on my own. Best of luck to you...

[MommyMc]

I agree with HHM and Flamingo. There is no way I could have filed on my own. My lawyer found me expenses I didn't even think of. When we initially met with him he said he could see us with a payment of $1200-$1500 each month, but in the end it's $716.
His fee was $3000 dollars. $500 was due when we signed with him and the rest was rolled into our payment.
Good luck to you!

[Nursegirl62]

I came here for support and to support others. I did not come here for a lecture. I promise you, there was no knee jerk reaction. I have been making payments to the IRS for the last 7 months at $1100/month. I tried to negotiate with them, but to no avail. As far as being able to afford an attorney, you don't know anything about my situation. I am now homeless and own NOTHING. Don't kid yourself if you think for one second that it can't happen to you. I am a registered nurse. The most trusted profession and the most desired. WE are hurting too. So sit back and get comfortable in front of your television sets, eating your large meals with your family and pass judgement on me, while my two children go hungry and sometimes wonder if they are going to kick us out of the hotel room we have been living in for the past year.

I DID WHAT I HAD TO DO. Now, I would like to continue receiving support from those who would like to give it... but if you are here to lecture me, keep it to yourself. To those who have constructive advice....THANK YOU SO MUCH. I feel very alone.

[Nursegirl62]

IRS force single and zero

Due to the amount of my back taxes, the IRS has issued an order that my status is single and zero as opposed to HOH and two dependents. Perhaps you should know the whole story before you starting handing out advice that was not solicited. Thank you anyway.

[Nursegirl62]

Thank you for your input. The attorneys in this area would accept nothing smaller than $1750 down. Guess they figured I could afford it being a health care professional.

[Flamingo]

Unless you posted on here that you were homeless and destitute, no one knows and goes by what you posted. If you are homeless and own nothing, you can investigate legal aid but to do a Chapter 13 you need income so you must be working and do not qualify for a chapter 7. We can only go by what you originally posted. What you received was constructive advise; many folks at the start of considering filing or just filing are emotionally distraught thinking no one understands and sometimes folks get very defensive because they don't want to be told anything that might help them when they may not be considering doing the right thing.

Have you investigated public assistance if you are that bad off to ensure your children are fed and have medical coverage? Again, you are posting this information and we are trying to help and understand. When I posted to you, I went by experience in filing a Chapter 13. I work in a law office (not BK) and believe me, I would never in a million years try to do it on my own without legal counsel. The time, research and that it is so easy to make a mistake under the new law may be a big factor for you being that you are working and have young children.

Best of luck in what you decide to do and please don't take constructive advice on here personally. Try to get beyond that as many of us have been in the exact spot you are, with or without TV or large meals also.

[Nursegirl62]

In the midst of all the good "advice" I have received I am going to drop this. I asked a question and got unrelated "advice" which very much sounded like a lecture. I believe that I will have a very successful bankruptcy and I advocate anyone who wishes to file bankruptcy on their own to do so.

[Flamingo]

In the midst of all the good "advice" I have received I am going to drop this. I asked a question and got unrelated "advice" which very much sounded like a lecture. I believe that I will have a very successful bankruptcy and I advocate anyone who wishes to file bankruptcy on their own to do so.

That's because you are brand new to all this and it is very overwhelming; believe it or not, you eventually get through all of this and look back and see that some advice or "lectures" were right on, and as stated previously, without total information, posters can only go by what someone initially posts as to their situation. I thought I was going to have a nervous breakdown prior to our filing. I wish this forum was around when we filed. The forums out that at that time offerred no support at all just people telling you you were a deadbeat and should pay your bills!

You will realize several months down the road what you took as a "lecture" was good thoughts and advice for you. You will not realize that now. There are many folks on here who have filed pro se, mostly Chapter 7's which may not be that complicated. Many people who attempt to file Chapter 13 pro se find they run into a lot of problems and several have posted on here that they had to obtain an attorney. That is not saying you will run into problems - we are trying to help you prevent any.

There is a pro se section filing forum on here and that would be your best place to go to see if anyone can help step you through the "land mines" which are out there in that process.

Best of luck to you.