Tax refund & BK filing timeline

[pambysue]

I am anticipating a total refund of $650 from federal and $410 from state taxes. I am filing my chap 7 petition the 1st week of march (i spoke with my attorney's office today and everything should be ready by then as I had to obtain a new counseling certificate) and I wanted to use most of the tax refund to pay the remaining attorney's fees ($760). Is is okay to file my taxes now and pay the attorney just prior to my filing? I dont want to do that and then have the trustee tell me that I have to give the court the $1060 that I received from my tax refund. I am in NY State (western) and I'm not sure what the allowed exemptions for tax refunds are.

[CATCHMEIFYOUCAN]

I would think if you show a receipt of what you did with the tax money (like pay the lawyer) THAT would be a reasonable cost. I think it odd that the TRUSTEE never asks where one gets the money to pay the lawyer! I mean your talking from $2000-$3000 here! YOU KNOW !

Good Luck, Catchmeifyoucan

[pambysue]

So true, Catch! It has been a real JOKE trying to save up the money for the lawyer! I mean..I am broke..that's why I am going into BANKRUPTCY! LOL
Well, that's what I will do then. I will just show that it was used to pay the fees. If they have a problem with that..oh well, I guess! I have hit rock bottom over the past year..what's one more pitfall!! haha!
Have a great day and thankyou for the reply!!

[yomama]

Pambysue, We will also most likely have an income tax refund coming, which we are spending on things that we absolutely need. I agree with Catchmeifyoucan, that as long as you have legitimate uses for the money and save your receipts you should be fine.

Oh, and I agree with you both...it's kind of ironic that it costs so much money to go bankrupt!

[SamanthaJones]

What, really, does a BK lawyer do for $2000?

From what I see, a paralegal will data enter your information, then the office electronically files your petition with the court. The court notifies all creditors. You go to a 341, with your laywer, whose purpose at that meeting is...emotional support, for what amounts to a five minute session? After that, the court waits to see if any objections are brought forward- if none are, the discharge is granted. So for $2000, what really did the laywer do? Is it really not just scare tactics that people can't file pro se?

[BassBoy]

From what I see, a paralegal will data enter your information, then the office electronically files your petition with the court. The court notifies all creditors. You go to a 341, with your laywer, whose purpose at that meeting is...emotional support, for what amounts to a five minute session? After that, the court waits to see if any objections are brought forward- if none are, the discharge is granted. So for $2000, what really did the laywer do? Is it really not just scare tactics that people can't file pro se?

Filing pro se can be dangerous if you are not sure of what you are doing. One needs to know the codes and laws......so.....if you don't have the "vocabulary" then it is wise to use an attorney who knows the codes and laws.

As for the fees the attorney charges; $2000 is peanuts compared to the amount one had owed and rid themselves of.

[keepmine]

Scare tactic my foot. BK reform is very unforgiving.

http://www.cob.uscourts.gov/faqs.asp

Please be aware that through January 20, 2006, 81% of the cases dismissed under the new provisions of the Bankruptcy Code were filed by debtors who did not have an attorney.

[BassBoy]

Nice piece of info keepmine. That's exactly why those who do not know the codes and laws should use an attorney. One slip on the part of the pro se filer, and the filer may have to start all over again.

[yomama]

Nice piece of info keepmine. That's exactly why those who do not know the codes and laws should use an attorney. One slip on the part of the pro se filer, and the filer may have to start all over again.

Yes, and that's exactly why my husband and I decided to do our bk through an attorney. Some people know the laws, but we didn't feel confident enough to go it on our own and take the chance of screwing up. Though we surely could have used the money to buy some things that we need here at the house, the $1000 we had to pay our lawyer went a long way towards giving us peace of mind.

[keepmine]

Further more, if you have a bk that is not exactly routine, a good lawyer is worth every penny if he/she can show you how to protect assets that may be above your states exemption level.
Many will also warn you about filing too quickly if you have recent cc activity.
I've also seen some instances here and there where I believe a petitioner was pushed around by a trustee or creditor because they were pro se.

[JollyGG]

Admittedly, when I looked over the forms I did notice that it didn't look that much more difficult than a tax return.
But, I'm so glad I had a lawyer. He was much better equipped to deal with correspondences from creditors. His “take a hike” letters were way better than mine would have been. He'd been around the block a time or two and gave good advice. Our trustee seemed to like dealing with him better than with some of the other lawyers there at our 341. He made sure that our simple case stayed simple. He is able to keep a calm head and not panic about things because it's not personal to him.
Admittedly we will be continuing to be paying our lawyer for another couple of months. But the cost of our lawyer was not even 1/10 our debt we erased.