Chapter 13 Trustees and Tax Refunds

[kornellred]

From reading all the posts, I get the impression that it is not at all unusual for Chapter 13 trustees to require the debtor to surrender tax refunds during the course of the plan. Or, at a minimum, to submit income tax returns.

I am in Chapter 13, and my trustee does not require either the surrender of any refunds or the submission of income tax returns. Therefore, my income could increase significantly, and my payments will remain fixed as per the plan confirmation.

Are these requirements described anywhere in bankruptcy law, or does the trustee have that much freedom? Also, would such requirements need to be ordered by the Court in the plan confirmation document?

[justbroke]

Are these requirements described anywhere in bankruptcy law, or does the trustee have that much freedom? Also, would such requirements need to be ordered by the Court in the plan confirmation document?

Most Trustee operate on the fact that you surrender, as per your confirmed plan, all disposable income to the custody and control of the Trustee for distribution to the unsecured creditors. This is why they require knowing whether you made more money, or had overwithholdings.

As you learned, not all Trustees do this "income tax return" review. However, it is your duty to inform your Attorney should anything significant change in your income (10% either direction).

[Bkman2]

Per my attorney, the trustee can have my tax refund if I had one (1099 self employed). My wife didn't file so when she does her taxes and gets a refund the trustee can't have it because my name is not on it. All she has to do is get a check and not put it in our account.

[CCB35]

In Northeast Tn.My trustee requires that the tax refund be sent to her first-However We get to keep anything under $1500 .the remainder if any goes into the plan for the creditors