Why do some Trustee's allow people to keep their tax refunds and others don't?

[NeedOptions]

Any ideas why? My trustee never mentioned giving up our tax refunds when we filed. In fact, our lawyer said we could spend it as we pleased. Why do some districts require tax refunds to be given up while others don't?

[chicagoannie]

For me (Illinois) we are able to exempt the EIC and that is a majority of my refund. The rest was covered by my $4K wildcard exemption.

I must say it does not seem fair that people in the same state, or even the same district, the trustees seem to keep or give up the refunds on a whim.

[free2breathe]

I have no idea why they vary so greatly across the board. I sure wish we lived in a state that allowed us to exempt any portion of ours. It would be nice to be looking forward to banking the refund instead of shipping it off to the trustee ;)

[lrprn]

Many people expect the bk law to be black and white and so equally enforced everywhere. However, much of bk law is all about judicial interpretations and prior case law decisions in the district or local court you file in.

Different trustees and bk judges interpret the same bk law different ways. That's what leads to the many differences seen in how the Ch 13 portion of the bk law is enforced across the country - this includes whether tax refunds have to be fully or partially surrendered or if you get to keep it all. Fair? No. It's just the way all law in the United States works. C'est la vie.

[momofthree]

I suspect our district is so busy they simply don't have time to review every single return each year in the search for a refund. Our trustee doesn't even want to see our tax returns each year.

[CCB35]

In Northeast Tn,our trustee allows us to keep anything under $1500.anything over that goes into the plan.

[mummsie223]

We have to send a copy of our return each year. But, they put our 2009 return into the overall earnings for 2009.

[debee]

They're all wired differently when it comes to the internal greedometer.

[free2breathe]

They're all wired differently when it comes to the internal greedometer.

"greedometer", I like that lol

[justbaby]

I was wondering the same thing. I knew for sure my trustee would ask for mine but he didn't. I hadn't heard anything about it actually. I owed back taxes that were all included in the Chap13. I called the IRS, both state and federal and they said usually the trustee would inform them as well, nothing. I will get my refunds!

[cspa522]

I'm in Missouri and as far as I know we are allowed to keep $600 of our refund. We raised our exemptions so we can keep as much of our paychecks as possible and get a smaller refund. But I'm pretty sure what I read in our BK paperwork it says only $600. Honestly, that's okay. I'd rather get more per month out of my paycheck and a smaller refund so the money goes in my pocket.

[justbaby]

Where in your bankruptcy docs is it? I'm hoping I haven't missed anything!

[cspa522]

I don't have a copy on me right now, but I know for a fact it was in there. I looked for it specifically!!

[enginegirl]

perfect greedometer LOVES IT!!! ..... mine is a greedy sob... everything she takes... every single last penny.... every raise, every bonus, ... she is a meanie...

[papie]

I honestly can't imagine having a trustee that takes everything and feel sorry for those of you that do. Bankruptcy is hard enough, let alone having some jackass who feels the need to take every raise, bonus, refund, and dime that you see for five years straight. We were not able to get our Chapter 13 payment any lower, so it pretty much takes every bonus and refund to keep up with our medical bills.

So, for those of you who have trustees that take refunds, does the IRS send you the full refund then you have to turn around and send it to the trustee? Or do they garnish your refund and the IRS sends it straight to the trustee?