Discharge Questions

[beccalizbeth]

Hi all!
Thank you for this forum. This is my first time posting because I didnt find my answers by researching so thought I would ask all of you.
We live in Georgia and we are in a 3 yr plan at 0% payback to unsecured and only have a $100 balance left to our lawyer. The plan was file on 3/6/2008 and confirmed on 5/22/2008.
Which date would be the 3 year mark? I looked over our ledger and we made our first payment in March 2008. I know we have a $100 balance left but wouldnt our trustee be sending us something if we were this close to done?
My lawyer said to continue paying until audit and then we would receive a refund but since we are 0% unsecured doesnt that mean they will keep extra and apply to the unsecured?
Also I havent filed our tax returns yet since we never got them back the last 3 years but I sat down today and did them and it looks like $4000 refund, will they keep that too even with only $100 remaining?
I thought this would be a easy ending since we did everything asked the last 3 years but starting to get worried that we are more than half way through March with no updates and my lawyer only gives vague answers.
We really need that $4000 and he keeps saying refund after audit but I dont see that happening with only secured paid off. ggrrr so frustrated!!!
Thank you everybody!

[Kuya]

Hi!

It seems that not all states and not all Trustees do things the same. I will tell you how it is happening with me, and it will at least give you some expectations:

I was where you are in December of 2010. I had a balance of $240 left to pay into the plan and I had tons of questions and no answers. This is how mine played out:

My payments were taken directly from from my paycheck every two weeks via garnishment. Once I saw that my balance was paid in full, I called the Trustee's office. She explained to me that my case will automatically get triggered and sent to their audit department for review. She explained that I must keep paying into the plan until told otherwise, but not to worry as I would get a refund check for any paid amounts. She also explained that they do not pay any more to the creditors than the case has allowed (therefore I would assume your refund check is safe).

In February, I received two letters from my Trustee. (1) Congratulations your BK13 is complete - but not discharged. Discharge would only happen once ALL checks to creditors (including any refund checks to me) were cashed and cleared the bank. Then the Trustee does a final report to the court. My second letter was one from the court ordering the garnishments to stop. It actually took until March 1 for my work to stop the garnishment.

So, my Trustee ended up issuing me 4 refund checks because my work kept over-paying into the plan. I must admit that the refund checks were very very timely.

On March 3, I cashed the LAST refund check (woo hoooo!) and it cleared their bank a few days later. unfortunately, they only get a bank update once per month (on the first lol), so I am in "wait" until April first. Apparently they can not close out my case until they run the check file from the bank - and that file only comes once per month.

Also, once the Trustee files the final report to the court, apparently my attorney will send me some affidavit I must sign and return to him, and then he will send it to the court. (My attorney agreed to email the form to help speed things up). Unfortunately the attorney says he is not allowed to send me this form until the Trustee files the final report.

Once the court has the final report and the affidavit, they will schedule a hearing date (not an actual hearing per se). And issue the discharge.

For me, it has been a long waiting game . . . I feel I am soooo close, and still so far away.

Your case and Trustee process may be the same or it may be different - but hopefully this will give you a basic idea of the process.

[BKchapter13]

Thanks for the information, I was wondering how discharge may go and this has really opened me up to more research. we sent our last refund check and it was cleared, we also made sporadic extra paymnts on our bk wage earner case, we are paying back @ 100% and plan on asking our attorneys for a early payoff next month. will this process be the same for an early discharge if we are granted it because even if we dont request a early payoff it will be paid in a month anyway regardless of the 44 months that we are in. What if we do nothing, do they keep drawing on our payroll for the next four months? Will the trustee advise my attoney that we are ready for discharge? Not knowing is really hard and hope some of the questions can be answered in this forum. Thanks for all your information, its helped me to stay focused and get through this, its not easy as my trustee warned..

[LadyInTheRed]

beccalizbeth,
Did your confirmation order say that you are supposed to turn over tax refunds to the trustee? If so, your 2010 refund will have to be turned over. Even if the requirement is not in the order, I suggest you hold on to the money until you are discharged. After getting so close, you wouldn't want to take any chances. The 0% to unsecured creditors is only an estimate at the start of your case. If after paying that $100 to your attorney there is money left over from your 36 monthly payments and the refund if you have to turn it over, your unsecured creditors will receive whatever is left. So, spending the tax refund is not necessarily spending money the trustee would end up refunding to you.

[beccalizbeth]

Thank you Kuya! Lots of great info! Did you have 0% to unsecured? Congrats on almost being done.
BKchapter13~Hope you get all of your answers! Congrats for being at the finish line!
Thank you Ladyinred! Yes we did agree to turn them over, in fact the last couple of years our returns go directly to the court.

So I talked to my lawyer and this is what she said...after our latest payment is disbursed we will owe $10.30, she said to send that in before April 1st so that the case will be closed by the end of April. She said not to do anything with our taxes until after the case is closed, that since we are getting a refund we dont have to worry about the April 18th filing date. She said once the case is closed they most likely would not reopen the case and that the trustee would return our money (since the irs would automatically send it to them as they have the last 2 years). I told the lawyer that I had received a letter from trustee back in January asking for our tax return paperwork by April 30th, lawyer said don't worry about that since trustee cant hold up our discharge because we havent filed yet (she said "They cant make you file, you can file whenever you want so that cant hold up your discharge")
Seems kinda sketchy for my lawyer to say not to do our taxes and I dont know how much I believe that they will not reopen our case but I paid these people lots of money to give me legal advice soooo.
We are at the end, I just hope everything goes smooth and my lawyer is right.

[newbie2]

So I talked to my lawyer and this is what she said...after our latest payment is disbursed we will owe $10.30, she said to send that in before April 1st so that the case will be closed by the end of April. She said not to do anything with our taxes until after the case is closed, that since we are getting a refund we dont have to worry about the April 18th filing date. She said once the case is closed they most likely would not reopen the case and that the trustee would return our money (since the irs would automatically send it to them as they have the last 2 years). I told the lawyer that I had received a letter from trustee back in January asking for our tax return paperwork by April 30th, lawyer said don't worry about that since trustee cant hold up our discharge because we havent filed yet (she said "They cant make you file, you can file whenever you want so that cant hold up your discharge")
Seems kinda sketchy for my lawyer to say not to do our taxes and I dont know how much I believe that they will not reopen our case but I paid these people lots of money to give me legal advice soooo.
We are at the end, I just hope everything goes smooth and my lawyer is right.

I'd ask your attorney to put all of what you just wrote in writing. (CYA)