Tax Refund?

[huffydogg]

I had my 341 meeting last week, and everything went good. My plan was approved and I was done in less than 5 minutes. The only question I have is whether I will be keeping my tax refunds? The trustee did not ask about my tax refunds, and my confirmation meeting is not until April 28.

BTW, my assigned trustee was not at the 341 meeting, she was running late that morning so her assistant handled the meeting.

[enginegirl]

Typically if you are not in 100% payback you will have to give up the refunds... but this does vary by trustee.. your best bet is to not count on keeping them. You can also raise your withholding so that you will get a small/no refund in the future (although I would wait until after the confirmation to change).

Also be aware that if you have had large refunds in the past the trustee may divide the amount of your refund by 12 and add to your payment!! (I know this from experience!)
Good Luck to you!

[newbie2]

Typically if you are not in 100% payback you will have to give up the refunds... but this does vary by trustee.. your best bet is to not count on keeping them. You can also raise your withholding so that you will get a small/no refund in the future (although I would wait until after the confirmation to change).

Also be aware that if you have had large refunds in the past the trustee may divide the amount of your refund by 12 and add to your payment!! (I know this from experience!)
Good Luck to you!

Please be careful with telling people to do that. In many districts you are not allowed to change your withholdings in order to minimize the tax refund. (Our district specifically states this on our confirmation orders.)

As always, it is best to ask the attorney what the practice is in the district regards to income tax refunds.

[Pandora]

Tax refunds being taken by the trustee definitely varies by state and even district. Some require any and all while others dont, and it isnt required to be in a 100% in order to keep them.

Everything should be listed on your confirmation order once you get confirmed. As newbie2 referenced, changing exemptions may not be allowed, again that all depends on what is on your order. We are allowed to change at will and get to keep all refunds and pay raises, it just depends on your trustee.

[FishersMike]

Agree with Pandora -- my attorney advised our Trustee lets you keep have the NET of any tax refund and bonus. But do require permission to change deductions ahead of time.

[huffydogg]

I looked at other cases in pacer that had the same trustee as mine, and I didn't see anything regarding tax refunds on their orders.

[99lawdog99]

A client showed me his confirmation order which basically has nothing about providing any future tax returns for review or future tax refunds. He asked what he should do if he gets a refund next year. I told him do nothing and keep it as he is not required to do anything. My question is if the confirmation order is silent what do they usually do about the tax refunds every year. By the way he was getting back about 2500.00 at the time of his hearing and nothing was mentioned about it and he was confirmed with his plan. Also all his creditors are unsecured credit cards so he is not paying back 100%. He's 9 months into a 60 month plan. I told him just make sure he keeps making all the payments and he should be fine. Any thoughts, it's in Pa.

[Okieblue]

With us, there are so many variables, in the past, we were military income only, so for the trustee to take past amounts and divide by 12 and add on will really mess us up! Who knows what is going on with the tax rates and with the child credit.

[jange]

A client showed me his confirmation order which basically has nothing about providing any future tax returns for review or future tax refunds. He asked what he should do if he gets a refund next year. I told him do nothing and keep it as he is not required to do anything. My question is if the confirmation order is silent what do they usually do about the tax refunds every year. By the way he was getting back about 2500.00 at the time of his hearing and nothing was mentioned about it and he was confirmed with his plan. Also all his creditors are unsecured credit cards so he is not paying back 100%. He's 9 months into a 60 month plan. I told him just make sure he keeps making all the payments and he should be fine. Any thoughts, it's in Pa.

I am also in PA, my confirmation order has no reference to any restrictions, taxes refunds, etc. I asked my attorney about the tax return and it told me the trustee has the right to ask for the tax returns but never does. So if he doesn't want the tax return he is not going to ask for the tax refund. mine was small enough last year I'm sure he is not interested anyway.
We are now 11 months in, I will just have to wait and see if we hear from the trustee.
confirmed 7/22/10.

[Lissy]

A client showed me his confirmation order which basically has nothing about providing any future tax returns for review or future tax refunds. He asked what he should do if he gets a refund next year. I told him do nothing and keep it as he is not required to do anything. My question is if the confirmation order is silent what do they usually do about the tax refunds every year. By the way he was getting back about 2500.00 at the time of his hearing and nothing was mentioned about it and he was confirmed with his plan. Also all his creditors are unsecured credit cards so he is not paying back 100%. He's 9 months into a 60 month plan. I told him just make sure he keeps making all the payments and he should be fine. Any thoughts, it's in Pa.

I am not in PA, but I am in the same situation. My confirmation order says nothing about it, but when I first began this process, my attorney told me I would most likely have to surrender my tax refunds. So I don't really know what to do this year either. I'm wondering if it will be a separate thing, like I'll get a letter in the mail from the trustee asking for my tax return and maybe even any refund I've received. Not sure, but that's a crappy way to do things if it does turn out that way. If they want my refunds, I'd rather they just say it in the beginning so I know what to expect.

On the bright side, my attorney was wrong about my student loans. He originally told me they would probably not be paid in the plan and would be deferred for the 5 years. I wasn't too happy about that, but what are you gonna do? Recently, I noticed on my TT's website that my student loans were set up as a claim in their system and they also recently cut them a check. It reduced the percentage that my unsecureds were going to get from around 70% to 44%. I was excited about that and although I'm not counting on it, I'm hoping my attorney was wrong about the tax refunds too!

[LadyInTheRed]

My trustee does not require copies of my returns or that I turn over my refund. But, I'm going to save any refunds anyway. A Chap 13 debtor is required to pay all disposible income to the trustee. If I get a refund, that means I have more disposible income than shown on my schedules. The trustee has a right to ask for my returns at any time. She may change her procedures. Or, she may leave her job and a new trustee who wants to see returns may take her place. My attorney would tell me I'm worrying too much. But, I'd rather be safe than sorry. I'll hold onto my refunds unless I have a budget-busting emergency. If I have no emergency (knocking on wood), the refunds will go towards my goal of saving 3 months worth of income.