is it ok to return to work before discharge ?

[stopthebleeding]

o I got it now but lets say my case is heard in dec . Will they wait until march for there money or does it depend on how much it is. I am filing chapter 7 and i claim what I am supposed to and i always get around 1-2k back . but i owe 75 k so that isn't gonna touch it.

[WantToBeDebtFre]

It all depends on the trustee. My attorney doesn't seem concerned that they'll even try to take anything at all. I think it varies depending on where you file.

[SinkingFast]

It really depends on the Trustee.

Our Trustee goes for $1K or more in refunds. That's State and Federal combined. If we got back $1K or more in refunds, our attny said the Trustee would take it.

Doesn't matter that it's not enough to pay off your debts. It's about money for the Trustee.

Ch 7 Trustees are only paid $60-$75/case heard. BUT, if there's assets,........... Ch 7 Trustees get 25% of the first $5K recovered "for the benefit of your Creditors". Above $5K, it's a sliding scale. The more money the Trustee recovers from you, the more money the Trustee makes for themselves.

So let's say you do get back $2K total in refunds,.......... That's a quick, easy $500 to line the Trustee's pocket.

AND, the Trustee has no out of pocket costs. The BK system is self supporting. The $299 filing fees we all pay take care of their "operating costs".

So yes,............ The Trustee will wait for you to file. If the Trustee asks about your refund,.......... Your attny's office will be calling you. Reminding you that you need to file and submit your filed taxes for review.

[demismom]

I was told to wait until after discharge, it was hard, I've been off work since February and we just got discharged this week.

[stopthebleeding]

So will they wait to close your case while they wait for you to file taxes? They get there money and then write off the rest or will they convert it to chapter 13 because you get a return? My case will stay open longer than and I will get back less this year i now that because I made more. What if that is the only asset they can suck out of you do you think they'll go for it? i just want this over and if I have to wait and file that stinks. I will be really mad at this company taking 7 months to file mei should have had this done a while ago.

[lrprn]

So will they wait to close your case while they wait for you to file taxes?

Yes, if your trustee wants to see your tax return before closing your case will remain open until your taxes are filed and the trustee sees how much you are getting for a return.

They get there money and then write off the rest or will they convert it to chapter 13 because you get a return?

You can't be converted to a Ch 13 because of a one-time tax refund. The trustee will take whatever he/she is entitled to of your refund, pay back your creditors that amount, and then will close your Ch 7 case.

If you know you are going to get a big return back for this year, adjust your withholdings NOW to reduce it as much as possible before the end of the year. Here's how to make those adjustments - http://www.irs.gov/pub/irs-pdf/p919.pdf

[SinkingFast]

So will they wait to close your case while they wait for you to file taxes?

Yep!

That's why there's such a gap between our Discharge date and Closing.

Our debts were Discharged on schedule. But the Trustee would not Close our case until,............. We filed our taxes and submitted copies of our filed income taxes with the Trustee. Because we got back very small refunds, the Trustee opted to abandon both our State and Federal.

After the Trustee posted the "No Asset" Report, we had to wait another month before the Clerk closed our Case. Our Court has a mandatory 1 month waiting period after final posting to Close a case.

[PaKettle]

People planning to file BK will very often dink with their withholdings to have less Net income. Make it look like they have less money to live on. So Trustees look at income tax refunds as "voluntary savings accts". Those were the exact words our Trustee used at our 341.

The refund you receive in Spring of 2008 is from 2007 earnings. Therefore, a portion of your refund is an asset of the BK Estate. The Trustee is entitled to take a pro rated amount of your refund based on when you filed. Sept is 9/12ths, Oct is 10/12ths, and so on.

If you normally get back a larger refund, or your combined State and Federal totaled $1K or more in previous years, the Trustee might ask to see your 2007 filed income taxes. In our case, we got a big refund 1 year and paid big time the next. Our Trustee wanted to see what a "normal" filing year looked like.

Just something to be prepared for.

I would like to add here that this apparently differs by state, and/or district, because our attorney said I did not have to adjust my w4 so I'd get back less than the $3k we usually get back, for our 2007 taxes, and that there was no way the trustee would take our refund. I'm not sure why this is, but I asked him twice about it to make sure I heard right, and he told me the same thing twice. So ask your attorney about it, or an attorney in your district if you're filing pro se.

I'm thinking maybe it's because we have no assets so we can use our Calif. homestead exemption ($20+ k) towards any taxes...

[rilbrianne]

Is that kind of cheating the system.... "resigning" your job to avoid having to pay back your debts? I mean, I understand how you feel but quiting your job so you can get through the meeting and then picking it back up again kind of sounds like cheating to me.

[nc73]

Is that kind of cheating the system.... "resigning" your job to avoid having to pay back your debts? I mean, I understand how you feel but quiting your job so you can get through the meeting and then picking it back up again kind of sounds like cheating to me.

It's only cheating if he gets caught.

[jp2861]

It's only cheating if he gets caught.

Oh, that's a brilliant comment!

[freshstart06]

Believe you can get caught especially if you are one of the lucky 250 that gets audit. at the meeting they will ask what happened to your job if necessary, and if you get audited or if you have one of those trustees that want to "look to deeply" in your case will find out you quit and have you not quit, you could have afford to go into chpt 13, you can dismissed and other things.

It just is not worth the risk to quit a job just to file. IN my case, I would give anything not to be on medical leave not knowing if it is okay to go back to work because I am not quite healed. Please don't give a your job (especially since jobs are hard to find) just to "trick" the system, this is why we keep getting new BK laws, lets not make it harder for the next person that "lost" their job to be able to file.

Instead of quitting a job, see if you can make the numbers work for you, if they don't then I really hate to say this but chpt 13 may actually be in your favor.

[CindyLou]

its not cheating!!!!! there will be not "getting caught" there is not law that tell anyone they have to work! Which law tell you that you have to go to work everyday? This is a free country, honey! If you don't want to work, then quit your job and file chapter 7. You are free to do that. Its not a scandal. its not a cheat. its a legitamate financial decision that is made frequently by debtors when trying to choose which chapter.

As far as when you can work again. I would be actively interviewing and on the question that asks when you are availabe I would put approx. a week after your 341 just to give you some time to get everything wrapped up and finished in case they requested any additional forms, etc. If you are asked if your financial situation has changed you can say "no" Until you walk into a new job and punch that clock the first day, its only a possibiilty. Period. They can offer you can accept, but until you actually start, no don't work there. You have to pass drug screens and background checks, etc etc, so I woudn't say ANYTHING at the 341 even if you have been offered and accepted. If you get offered close to the 341 then don't accept until after. Just keep it simple. Until you start you don't have the job. Until you get a check your financial situation hasn't changed. If they ask if you forsee you situation changing you can say, "well we all hope that our finanaical situation will change for the better and I will keep reaching for improvement."
Good luck

[rilbrianne]

its not cheating!!!!! there will be not "getting caught" there is not law that tell anyone they have to work! Which law tell you that you have to go to work everyday? This is a free country, honey!

You can be free, but nothing in America is free my dear. You still have to pay your debts and if you sneak around the laws of bankruptcy... I hate to say this, honey, but that's cheating.

[freshstart06]

it is cheating, in my 341 meeting my trustee made mention of this and told anyone if they quit their job just to file and if they get caught their case can get dismissed. Now I am not saying if you quit your job 9 months prior and you really did not know you were going to file but if you quit just to file then that is cheating, it is no different then moving money around just to file.

I don't care if you are upset with my answer, some of us or should I say most of us on this board really had to file!!! I feel if someone had to quit their job to just to file then they did not qualify in the first place and in the long run the BK courts will catch on and make it harder for everyone. Most of us, did not have to quit a job to file, we wished we had a job that paid us well enough so we could not file.

Even though my case is pretty much over, I can honestly say, it took a very long time to come to terms with this. We are considered over the median but we passed the means test with flying colors and had no problems in this entire BK process but I still had a hard time emotionally.

In some ways I can understand timing, in cases you have to pick a month to file so you can have no problems passing the means test but to quit your job just to file is crazy unless you are working more then one job and it is just too hard to keep up with both.

I applaud everyone that had to or was forced into chpt 13, they were honest, I am sure they wanted to quit their jobs and do something desperate but they did not!!! even if you file 7 and was forced into 13 after 6 months if times get hard you can convert back to 7, but just be honest about it.

Also, by quiting your job a creditor can objected for fraud depending on how well they can investigate the situation.

But, yes, you always quit but to quit just to file is straight fraud

Just my two cents.