Tax Refund Usage Question?

[smkrishna]

I am about to get around $7k as tax-refund for 2009. My attorney told me that to use it to buy cloths, toys or other items for household. I forgot to ask her about what are the items that are allowed that we can show as legible expense for this amount since it's a big amount.

I am planning to buy stainless steel appliances for my house (fridge, microwave, dishwasher and oven) to show the tax refund being used as my appliances are almost 9 years old. Will this be a problem for Ch.13?

How about sending tax refund money to foreign country where my and my spouse parents, brothers live?

Your inputs will be really appreciated.

[justbroke]

I am planning to buy stainless steel appliances for my house (fridge, microwave, dishwasher and oven) to show the tax refund being used as my appliances are almost 9 years old. Will this be a problem for Ch.13?

Not for a Chapter 13. Howebver, this may increase your household items valuation meaning you'll pay for them twice. Yes, I mean it. Please talk to your lawyer to see if this is the correct usage of the money. The money should be on necessities. A stainless steel fridge, microwave, dishwasher and oven are not necessities.

Again, since you're in a Chapter 13, you "could" buy them, but it would increase the value of your personal property and you may end up having to pay that amount to the unsecured creditors (buying it "twice").

How about sending tax refund money to foreign country where my and my spouse parents, brothers live?

Not unless you can prove that your spouse's parents are elderly and depend on your care. Even then, that's not going to fly and you'd probably end up before the Judge explaining it. Remember, your personal expenses can only be for things that you HAVE to pay, not WANT to pay. For example, feeding your wife and children is a HAVE to pay. Feeding your girlfriend and "her" children is a WANT to pay. With the girlfriend or even relatives (not living with you) may not be a "legal" obligation and would not be allowed.

These are specific questions for your attorney. He may be willing to help you explain on the "parents" abroad, so long as they are elderly, but explaining sending money to brothers, sisters and buying "stainless steel" appliances because yours are old (but working)... may be considered an abuse.

Certainly buy exactly what your lawyer stated. Food, clothing, spend it on rent, fixing your car (so it runs, not to get a new color), seeing the dentist or doctor and similar things.

[smkrishna]

Thanks Justbroke for such a detailed reply. I will talk to my attorney about this. I really appreciate your help.

[smkrishna]

Not for a Chapter 13. Howebver, this may increase your household items valuation meaning you'll pay for them twice. Yes, I mean it. Please talk to your lawyer to see if this is the correct usage of the money. The money should be on necessities. A stainless steel fridge, microwave, dishwasher and oven are not necessities.

Again, since you're in a Chapter 13, you "could" buy them, but it would increase the value of your personal property and you may end up having to pay that amount to the unsecured creditors (buying it "twice").

Not unless you can prove that your spouse's parents are elderly and depend on your care. Even then, that's not going to fly and you'd probably end up before the Judge explaining it. Remember, your personal expenses can only be for things that you HAVE to pay, not WANT to pay. For example, feeding your wife and children is a HAVE to pay. Feeding your girlfriend and "her" children is a WANT to pay. With the girlfriend or even relatives (not living with you) may not be a "legal" obligation and would not be allowed.

These are specific questions for your attorney. He may be willing to help you explain on the "parents" abroad, so long as they are elderly, but explaining sending money to brothers, sisters and buying "stainless steel" appliances because yours are old (but working)... may be considered an abuse.

Certainly buy exactly what your lawyer stated. Food, clothing, spend it on rent, fixing your car (so it runs, not to get a new color), seeing the dentist or doctor and similar things.

Justbroke, I talked to my attorney today and asked about buying appliances. She said that's totally fine and it doesnt matter whether it's stainless steel or not. Nobody looks into the receipt and ask for the reason to buy stainless steel appliances. She said that some of her clients even made home improvement with tax refund!!! She also said that I have a better justification as my appliances are almost 10 years old and start giving problem.

What is your opinion justbroke? As you know, both of us live in s.florida. I will be interested in knowing your views on attorney's opinion.

[justbroke]

What is your opinion justbroke? As you know, both of us live in s.florida. I will be interested in knowing your views on attorney's opinion.

I say great! I just wanted to make sure that your attorney and District are okay. It is true, the type of appliances aren't listed and you do indeed have a reason to purchase them. Home improvements, where they fix or restore the habitable conditions are always okay. I would say putting in a new pool... would not be acceptable.

This is why I wrote that this isn't a "problem" for a Chapter 13. I was more worried about the value of those items and your exemptions, than that they were actually "stainless".

[smkrishna]

I say great! I just wanted to make sure that your attorney and District are okay. It is true, the type of appliances aren't listed and you do indeed have a reason to purchase them. Home improvements, where they fix or restore the habitable conditions are always okay. I would say putting in a new pool... would not be acceptable.

This is why I wrote that this isn't a "problem" for a Chapter 13. I was more worried about the value of those items and your exemptions, than that they were actually "stainless".

When I asked her about the values of those items and exemptions, she says the main thing that trustee looks into is the NDI and values of household items and exemptions are almost standard and not really looked into!!!

The way she replies for my questions, I feel so happy but at the same time, I am worried whether she is over-confident or giving a false hope to go with her!!! That's why I want to confirm with others in BK Forum.

[dirtpoor]

I know every district is different but I find it hard to believe an attorney would give the OK to spend a tax refund without getting an OK from the trustee. Unless I missed it somewhere if you don't have the trustee OK, you may end up having to pay that money back.

[justbroke]

I know every district is different but I find it hard to believe an attorney would give the OK to spend a tax refund without getting an OK from the trustee. Unless I missed it somewhere if you don't have the trustee OK, you may end up having to pay that money back.

I believe that she hasn't filed yet. Also, a Chapter 13 is treated much much much more differently than a Chapter 7 when it comes to exemptions, cash on hand, etc, etc!

[QUOTE=smkrishna]When I asked her about the values of those items and exemptions, she says the main thing that trustee looks into is the NDI and values of household items and exemptions are almost standard and not really looked into!!![/QUOTE}Absolutely true. Chapter 13s are treated much more different than in Chapter 7s, concerning exemptions.

[smkrishna]

Justbroke..you are right. We haven't filed chapter 13 yet. We are planning to file only in the month of June or July.

[bksipak]

smkrishna,
Can you suggest a good ch13/ch17 attorney S. FL area. I may run into same situation as you have been and will need a competent attorney. You can PM me.

Thanks

[bksipak]

smkrishna,
can you share your attorney contact info? I'm in S. FL and looking for a good attorney.

Thanks.

[smkrishna]

I'll do PM to you with my findings.