Discharged - but atty wants 2007 tax returns to turn in to Trustee?

[ilovemycaitybug]

I did not want this to turn into a negative conversation... and I feel it has become so. WAM, I do feel for you. I do not understand why anyone would "flame" your circumstances. I am so thankful, as you are, for the second chance we have been given. But, there is only so much you can do. Sometimes it just simply does not "pay" to work when you have children younger than school age. Daycare is expensive, and multiplies for each child you have. I feel this thread has become negative and hurtful and off-subject. Everyone's circumstances are different. One person may be able to work 2 jobs but it may not even pay for another to work at all. Please, do not judge.

[keepmine]

I did not want this to turn into a negative conversation... and I feel it has become so. WAM, I do feel for you. I do not understand why anyone would "flame" your circumstances. I am so thankful, as you are, for the second chance we have been given. But, there is only so much you can do. Sometimes it just simply does not "pay" to work when you have children younger than school age. Daycare is expensive, and multiplies for each child you have. I feel this thread has become negative and hurtful and off-subject. Everyone's circumstances are different. One person may be able to work 2 jobs but it may not even pay for another to work at all. Please, do not judge.

I have no idea why pointing out that if you can't support yourself post bk it's a flame.
I think we can all agree that filing bk is some serious business. Far too many people come here {and other bk sites} with the thought that if they can just get relief from their current creditors then, that's the end of the process. Unfortunately, that's not how it works. Some figure that out and some don't. Capitalism is the most efficient economic system on earth. Unfortunately, it's also the most unforgiving. If you file bk and still can't go to the store until payday or, have to wait until your tax refund to get basic medical services, you're bk has accomplished nothing. The truth is no flame.
It may well be too late for some who find themselves in this predicament but others who have just started the bk journey and are reading this-maybe it'll give them something to think about.
My favorite bk case of all time is from a 1934 Supreme Court decision about something that is of no consequence today but the Justices reasoning is outstanding as it relates to the general theme of personal bk.

http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=US&vol=292&invol=234

One of the primary purposes of the Bankruptcy Act is to 'relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.' Williams v. U.S. Fidelity & Guaranty Co., 236 U.S. 549, 554 , 555 S., 35 S.Ct. 289, 290. This purpose of the act has been again and again emphasized by the courts as being of public as well as private interest, in that it gives to the honest but unfortunate debtor who surrenders for distribution the property which he owns at the time of bankruptcy, a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt.

It's hard to "start afresh" if you're struggling to pay basic living expenses post bk.

[PaKettle]

So since I will be filing in October, there is a very good chance they will want our joint tax return refund in February?

Let me understand this: So, I can claim, say 8 dependents (even though I have only my wife and I, in reality) so as to decrease the amount taken out each week, and since the Chapter 7 is based on gross income, not net, that will help me keep more money in my pocket and give less to the trustee at tax return time? Is that what you are suggesting?

We usually get back over $3k with state and federal and it's always a nice bonus in February for us. So, as soon as I file, I can just adjust my dependents upwards to 8 or so (anyone know what the legal limit is in California?) so I can keep more of our money?

[JollyGG]

So since I will be filing in October, there is a very good chance they will want our joint tax return refund in February?

Let me understand this: So, I can claim, say 8 dependents (even though I have only my wife and I, in reality) so as to decrease the amount taken out each week, and since the Chapter 7 is based on gross income, not net, that will help me keep more money in my pocket and give less to the trustee at tax return time? Is that what you are suggesting?

We usually get back over $3k with state and federal and it's always a nice bonus in February for us. So, as soon as I file, I can just adjust my dependents upwards to 8 or so (anyone know what the legal limit is in California?) so I can keep more of our money?

Yes you have the right idea. Here is a calculator that will help you figure out how many to claim to get your refund as close to zero as possible. http://www.irs.gov/individuals/artic...=96196,00.html

[PaKettle]

Yes you have the right idea. Here is a calculator that will help you figure out how many to claim to get your refund as close to zero as possible. http://www.irs.gov/individuals/artic...=96196,00.html

Thanks for the link, I just looked at it and bookmarked it! A quick guesstimate of entries in the calculator suggests I should change my W4 to "7" instead of the current 2.

My only question is, do I do this now, or do I do it after I file, or does it matter, since the means test is based on gross income? But what about disposable income? I will obviously have more after changing this... So when do I change it?

[JollyGG]

Thanks for the link, I just looked at it and bookmarked it! A quick guesstimate of entries in the calculator suggests I should change my W4 to "7" instead of the current 2.

My only question is, do I do this now, or do I do it after I file, or does it matter, since the means test is based on gross income? But what about disposable income? I will obviously have more after changing this... So when do I change it?

If I remember right you are securly under the median and doing a chapter 7. In that I case you can change it any time you want to. I would probably change it sooner so that you can get your refund as close to zero without having to adjust your W4 too high.
Check back with the calulator every couple of months to make sure that you are still on track. After all you certainaly don't want to end up oweing.

[PaKettle]

Sicko

As to health insurance and people not having enough money to pay for necessary medical bills, before OR after bankruptcy, I would like to comment.

First of all, my wife and I, for example have health insurance, which my employer pays most of but which depending on how much I earn each month, I have to subsidize to the tune of $100-225/month. Ironically, the less I earn, the more I have to pay towards the insurance, making it more of a hardship.

In my case, although I have health insurance, they would not pay for medically necessary dental work for myself, and it cost us over $15k last year, which we had to borrow money from credit for, and that is more than anything else what drove us into bankruptcy. We had our heads above water, were still making payments okay, but those extra credit payments for that extra $15k is what put us over the edge. It is my belief that my medically necessary dental work should have been paid for by my medical insurance.

Now, the question I would like to raise, is What kind of country do we live in, where needed medical and dental and optical expenses are not covered by "full coverage" medical insurance?

There are people who have medical insurance, for example, but their HMO insurance will NOT PAY for their needed surgery or other procedure. Why? Because the HMO's and other insurance plans are not about helping sick people, but rather about MAKING MONEY for themselves and their stockholders! (even at the expense of patients' health)

People are routinely DENIED COVERAGE for needed medical procedures, for life threatening illnesses, by these greedy medical corporations! It's a fact.

I encourage everyone here to see Michael Moore's "Sicko"! It will show you that even HAVING insurance does not insure that you will be covered, and that you might not need to pay exorbitant sums of money to get things done because your HMO simply won't cover it!

In my case, my dental work was medically necessary yet my HMO would cover NO part of it! But okay, dental is dental and medical is medical you might say. Fine.

But what about all these people who have medical insurance yet find themselves having to go to India or Thailand or Mexico or wherever to get the care they need, cheaper, and pay for it out of their own pocket, because their PAID INSURANCE PLAN won't cover their needed procedures??? Why won't they cover it? Because to cover it would cost money and they are about not spending money on operations if they can use the exemptions in their plans to deny coverage of those operations!

Watch "Sicko" and see the truth about these horrible institutions that are medical insurance corporations! Whether you agree with Moore's politics or not, he has done a great thing here by exposing these greedy bas***ds who run the medical insurance corporations! See it and decide for yourself.

What we need is medical care for EVERYONE, just like other countries have! We are even below the level of health care of some 3rd World countries, now! And needed medical care is I'm sure driving more and more people into bankruptcy!

[PaKettle]

If I remember right you are securly under the median and doing a chapter 7. In that I case you can change it any time you want to. I would probably change it sooner so that you can get your refund as close to zero without having to adjust your W4 too high.
Check back with the calulator every couple of months to make sure that you are still on track. After all you certainaly don't want to end up oweing.

Right! Thanks!

[whatamess]

Right on Pakettle. My mother buys full coverage Blue Cross/blue shield alon side her medicare. Her blood and bone tests and been coming up odd for over nine months yet the HMO REFUSES to pay for furthur testing to rule out bone cancer!! The Dr is irate, she has been fighting them. By the time they decide to pay, the cancer could be so far gone you can not even be saved.
My medical bills in BK are from insurance we had that refused to pay for hospitalization after an accident. They said the car insurance company should pay. Car insurance said HMO should pay. Long story.
Lawyer failed to get final amount paid in full. Had I done a third party lawsuit I would be on easy street but I decided to be nice and not make this guy loose his small company over one bad judgement. I guess I am the fool.
This is why we use our trips to Korea to get medical care. the care is EXCELLENT, the Dr.'s are well trained, (many in US hospitals), & everythings super clean.
Back when I was in my early 20's I was hospitalized while in France and the care there was also top notch.

WAM



[QUOTE=PaKettle;108019]
.
People are routinely DENIED COVERAGE for needed medical procedures, for life threatening illnesses, by these greedy medical corporations! It's a fact.
your HMO simply won't cover it!


But what about all these people who have medical insurance yet find themselves having to go to India or Thailand or Mexico or wherever to get the care they need, cheaper, and pay for it out of their own pocket, because their PAID INSURANCE PLAN won't cover their needed procedures??? Why won't they cover it? Because to cover it would cost money and they are about not spending money on operations if they can use the exemptions in their plans to deny coverage of those operations!

[SinkingFast]

Hey there! Thanks... I hope you're right. We really count on the refund each year, that's why we both claim 0. True, it's an interest-free loan to the government but I don't mind as long as I can count on that refund at the end of the year!

At our 341 in October last year, our Trustee said he wanted to see our 2006 Income Tax Returns.

On the way out of the Court House, our attny told us to jack our withholdings to the max. Have as little taxes withheld the remainder of the year as possible. Our attny said our Trustee is typically interested in $1K or more. When we filed our taxes, our refunds were less than $600 combined. The Trustee abandon them and closed our case.

Here's a link for you to keep track of your income taxes:

http://www.irs.gov/individuals/artic...=96196,00.html

Just plug in your info and that calculator will give you a good idea of what to anticipate. You can adjust as the year goes along to be sure you won't owe anything.

When we changed our withholdings, we jumped them up to 10. The gal in payroll said if we went higher, the IRS would investigate.

[whatamess]

Would the trustee get angry about that? Since we are family of four should we declare four? Our 341 was today, the trustee said nothing about anything tax returns or otherwise. She said "okay we are done" and thats it. Should I do the IRS thing or wait to see? Our tax returns are quite large.
Hmmm
WAM

[lrprn]

Would the trustee get angry about that?

No, it's fine to adjust your withholdings as needed throughout the year.

Should I do the IRS thing or wait to see? Our tax returns are quite large.

I would adjust your withholdings now. You can adjust to beyond 4 if you need to so your refund is between $250-1000. Find out from your lawyer if your trustee is likely to take your tax refund (some don't) and what % of the total refund he/she might take.

Here's the IRS booklet "How Do I Adjust My Tax Withholdings" http://www.irs.gov/pub/irs-pdf/p919.pdf to make sure you don't get a large 2007 tax refund next year. Better not to make Uncle Sam your savings account - he gives zero interest and allows no early withdrawals Keep your money in your own pocket until you need it and get some interest to boot.

If you don't make the adjustments, then you may have to give all or part of your refund up to the trustee next year when you get it.

[SinkingFast]

My only question is, do I do this now, or do I do it after I file, or does it matter, since the means test is based on gross income? But what about disposable income? I will obviously have more after changing this... So when do I change it?

Personally, I'd wait until after filing. That's what we did. And we jacked our withholdings to 10. That's what the Payroll Gal said we could do and not cause an IRS investigation of us.

Remember,....... You'll need to account for the extra "disposable" income when I is compared to J. If you increase your withholdings now, your Net pay will also increase. So be sure to take that into account.

[PaKettle]

Personally, I'd wait until after filing. That's what we did. And we jacked our withholdings to 10. That's what the Payroll Gal said we could do and not cause an IRS investigation of us.

Remember,....... You'll need to account for the extra "disposable" income when I is compared to J. If you increase your withholdings now, your Net pay will also increase. So be sure to take that into account.

Okay, thanks for the clarification. I was thinking it would be better to wait for after filing.