Motion to Dismiss after 2 yrs. and no warning?

[bigreddog]

We just received a letter from the trustee seeking a dismissal of our case. We've been in for 27 mths. and haven't missed a pmt. Our BK paperwork makes no mention of having to send anything to the trustee, but they changed the law in our district recently requiring tax returns be sent to the trustee to see if one is overwithholding. No warning. Just a Sept. date for dismissal..........
We filed an extension and got our return back from the accountant only to find we owed the IRS $6000. We haven't sent in the return yet because we have a $7000 inheritance due anyday. I emailed our attorney and he said not to worry. We'll just send the trustee the return and they'll withdraw the dismissal. Obviously, we didn't over withhold so we'd get alot of money back. But we did pay in $11,000 so we thought we'd be safe.
Could it possibly be that simple?

[Billssuck]

That just stinks. We haven't received anything telling us to send in our tax returns each year to our trustee. I guess I will ask our attorney next year after we file our taxes. Sorry no answer here; just sympathy.

[Flamingo]

Many states now require tax returns to be submitted to the Trustee. In your situation, you were not notified of the change as it was not in place when you filed. That is your attorney's error who should have notified all his clients in a 13 of the change and what to do. I am not certain if it is a requirement of the Trustee's office to send out notifications involving changes to requirements of the trustee to active 13ers.

All you will have to do is submit your returns as indicated by your attorney. Your $6,000 IRS bill is your own responsibility. If you pay it with the inheritance money, make sure your attorney is given all those details as the trustee would have an interest also in the $7,000 inheritance which also needs to be reported. There may be no issue as it would be used to offset taxes due but this is something to discuss with your attorney.

Best of luck to you.

[justbroke]

The Motion to Dismiss is the warning. It does have a date on it too. It's quite easy to rectify as you just submit them to the Trustee and your attorney makes sure that they will withdraw the Motion.

As already stated, sending in Tax Returns is very common. I wish all the Districts did this, as it would make the requirements of a Chapter 13 more consistent throughout the Country.

The inheritance money will be interesting. The Trustee may want you to give it to him, so that he can take his 10% (or whatever his rate is), cut before sending it to the IRS. Since the IRS is a priority creditor, they'd get paid anyhow... if the Trustee were to take the inheritance. Make sure you work this through yoru Attorney.

[BKOnce]

OP's attorney is LAZY!!

[bigreddog]

They don't mind all the trees they kill sending us all those stupid transfer of claims to zombie collection agencies, but send us something as important as a new law pertaining to all debtors????? It sure would take alot less time than filing the motion. Lawyer is going to send it right in.
Nothing like a motion to dismiss to give one a kick in the ass!

[sharina]

BigRedDog:
That stinks, but at least it's fixable. What state are you in? My attorney sounds like yours!!

[bigreddog]

I sure hope the trustees don't monitor this Forum.... Let's just say we get alot of snow here after November. ALOT!!
And I have to say, after reading some of the nightmares on here concerning lawyers, my complaints are trivial. Yeah, he's hard to get a hold of. Yeah he's slow about responding. But he a polite, calm, listening lawyer. And he hasn't pulled any fast ones on us. I think he responds to his calls and emails according to their severity. Because when we've been in really tough positions, he gets right back to us and sets up a meeting. Like I said, he told us not to worry about it. He'd just send in the return. Even our Trustee has been awesome! And when I say awesome, I mean, no objections and not a peep out of him until now. And we're on a less than 12% on $140k unsecured plan. I didn't think I could live thru the first year. Now we're past the second.

[dp0127]

If you file a less than a 100% plan then your trustee will ask for the check on your tax returns to pay unsecured debt.

[lrprn]

If you file a less than a 100% plan then your trustee will ask for the check on your tax returns to pay unsecured debt.

This is *not* necessarily true.

Some local trustees may operate this way, but others do not. A few Ch 13 trustees never ask for and don't want to see annual tax returns, period. Others want the return every year and take every penny of any refund. Others take the refund, but only if it's over a certain amount. Bottom line - there's tremendous variability across the country around how tax refunds are handled in active Ch 13 cases.

To find out what your local Ch 13 trustee expects in any situation (including tax refunds), ask your lawyer.

[bigreddog]

This is *not* necessarily true.

That was part of my reason for asking about this. They only made it Mandatory starting Jan. 1st. for all ch. 13 cases to send in tax returns in our region. In that respect I'm lucky because 2007 we got our stimulus and a $3300 refund. And our attorney said we could keep it because he said he knew we could prove it went right back into the business for 2008 taxes. We had $11,000 withheld and it wasn't enough this year. Damn self employment taxes and state business taxes and now they want to tax Single Member LLC's even though the IRS considers all profit to pass thru just as if it were a sole proprietorship. We can't win.
Oh well, at least I never invested my life savings with Bernie Madoff....

[bigreddog]

Not very good update. I emailed our attorney as soon as we received the notice of dismissal which is in Sept. Since then we've come up with the money to pay the IRS bill and the State business tax bill. So I emailed my attorney with a copy of our returns in PDF and asked if we should send our trustee the same with a copy of the checks attached. He said he'd talk to us the next day. I've called, and emailed and always ask for a received and read receipt. I get the received receipts, but the last few haven't gotten the read receipts. So I call the office and the secretary says she'll give him the message. I haven't heard from him yet. And the dismissal hearing is only a month away. What should we do. Up until this episode I'd have to call our attorney a class act. Courteous, firm but understanding and got us a plan that I still can't believe. Good thing because this economy has killed our business. We're hanging on by the skin of our teeth. What should we do? I really don't want to do an end run around our attorney because I know we're going to need his help in the near future with a creditor who didn't file a claim on time two yrs. ago but is going to do so soon.......

[lrprn]

Up until this episode I'd have to call our attorney a class act. Courteous, firm but understanding and got us a plan that I still can't believe. Good thing because this economy has killed our business.

To a lawyer, sometimes a month is an eternity. Since you are worried (I would be too), you have a couple of options - continue to call daily until your lawyer calls you back; if your lawyer is good about emails, send an email every day until you hear something back; or call the office and get a face-to-face appointment within the next two weeks to discuss exactly how your lawyer plans to deal with the dismissal.

This is not the time to be polite. It's time to be a pest

[rrockinggramma]

To be safe, I would make a lot of copies and keep copies and the original for yourself. Then I would mail copies to the trustee's office (look for a "who does what" on his website and try to direct it to the right staff person that takes care of tax returns and I would also send copies to your attorney.

I did that every year and every year my attorney also mailed copies of my copies.

But I would go ahead and get those sent in. You might try RRR to verify the trustee's office received them. (not the same address as the payment address)

[hughthehand]

i sent my trustee in a copy of the irs transcript of my return.