Help! How can I keep my tax return?!?!

[stupidspendr]

I am receiving a good amount of money back on my federal income taxes. According to my lawyer, I have to turn over all of my check to the trustee. (I live in GA by the way.) I am looking to see if anyone has any advice or ideas about how I could avoid this and keep the money. Does anyone know of any loop holes I could use? This is my first year of being in bankruptcy and it has been very hard financially. This money would be a huge help to us!! Thank you for any help!

[HHM]

If your lawyer doesn't have any loopholes for you, what chance do you think we have

[stupidspendr]

My lawyer stinks! He very seldom responds to my messages and emails I send so I am quite frustrated with him. The only thing he told me before I even knew what my refund would be was if I had a major expense I would have to go ahead and pay for it and then he could put in a request to have money sent back to me. This would be ok but I can't afford to do anything extra with the money I have! Anyway, I was hoping someone may have had a similar situation and could enlighten me, that's all.

[HHM]

I can't speak specifically to GA, but generally, the tax refund is considered disposable income and therefore is subject to turnover to the trustee IN FULL. How must people deal with this is they adjust their withholding so they don't have much of a refund. But, there really are no loopholes.

[justbroke]

Since you're in Georgia, you fall under the 11th Circuit Court of Appeals. Basically Florida, Georgia and Alabama are all under that.

It's basically well known that tax refunds are the property of the estate as they consider them "overpayments" of taxes. Since you took a deduction for the taxes on your Form B22C, which derived your disposable monthly income, any refund of an overpayment means that you "over calculated" your withholdings, and any refund goes to the Trustee for payment to the unsecured creditors. (There is one exception where a refundable earned income credit (EIC) can not be taken by the Trustee.)

You need to adjust your withholdings so that you get very little back, or that you have a balance due.

[bksmith12345]

We were very specific with our attorney about our tax refund. It is intentionally large each year. About $12000.

He included it as income in our plan. $1000 per month.

The trustee confirmed us. Without the tax return we couldn't meet the plan. We asked him if we should change our witholding. He said no need to.

Now if we knew we had to turn it over we definately would have adjusted our witholding for sure.

Do you have any major home or auto repairs that need to be done? If so, maybe your attorney can ask the trustee if you could keep some and do the repairs.

[EricaCallaha]

In your confirmation language...if it says to turn over any refunds, you MUST turn them over by the date specified. You may be able to petition the trustee to be able to keep the refund and do some repairs or deal with a major unexpected expense. But you have to give the money to the trustee in the meantime. Your lawyer should have had you adjust your withholdings so you wouldn't get a refund.

Good luck.