Reopening of my Chapter 7

[sidvic]

I filed for Chapter 7 in October 2004 and the case was discharged December 27, 2004. At the time of our creditors meeting the trustee said that he wanted my tax returns, that was the first time I had heard of that. When I received my federal return I gave it to my lawyer, they then asked me about my return so I faxed it to them and they forwarded it to the trustee. Last week I received a "Notice of hearing on motion to reopen case and set aside the Trustee's report of no assets", Last year my return was around $2400. This year I was totally shocked to see the return at $3400. Is it because my return was so much that they wanted to reopen my case? I could really use that money for repairs on my vehicles and house. My lawyer (or better his legal assistant) doesn't seem to be of much help, I never seem to be able to get any answers from them.

When talking to a friend, they seemed to think that maybe my lawyer missed information in my bankruptcy and that is why it is being reopened.

I would appreciate any ideas on why this is happening now, I am a little bit nervous because we have to go in front of a judge on May 25th.

Thanks
sidvic

[HHM]

To answer your question, yes, the trustee is reopening your case to get at the refund.

To answer your question, no, this is not abnormal and is par for the course. Your going to lose some, probably all, of the refund to the trustee. It will be prorated to some degree as the trustee is only entitled to the portion of the refund that covers the time up to the filing of your petition.

Typically (but I don't know about your area) how it works is that they divide your refund by 365 (days) and then add up the days from Jan 1 to the date your filed petition, and that is what they take.
$3400/365 = 9.315, lets assume you filed on October 1, so that is 274 days. Thus, the trustee will probably want $2,552.31 of your refund.

Your lawyer probably should have told you that you needed to turn over your tax returns, but otherwise, it doesn't sound like he/she dropped the ball. The only issues that might work in your favor is whether you have a wild card exemption in your area, or you are married and filed by yourself, then your wifes portion would not be subject to the trustee.

[dck]

I would imagine they are considering your Tax return as an asset now. As far as the lawyer and the assistant...I can relate very well. The difference is, I will be in contact with them for another 3.5 years (chapter 13)...you only have about 3 more weeks! Hope all goes well for you and try to remain calm, (I understand how hard that is). There is light at the end of this dark tunnel.

[rhonda0503]

The exact same thing happened to me. Our case was discharged in Jan 05 and closed a week later. We rec'd our refunds in March and forwarded to trustee. In April we rec'd notice that trustee was reopening case. I was totally frantic and I called our lawyer and was told that it was normal procedure because trustee closed before he rec'd refunds. I was told by our lawyer that we didn't have to go to the hearing, we only had to go if we objected to it, and we weren't. I called trustee's office and talked to his assistant and was advised that we can expect our portion of the refund either late May or early June.