341 Today.... asset case due to tax returns

[Kristarelle]

We just had our 341 hearing this morning. Everything went very well, very quick. Our case is a Asset Case because she will be taking our Tax returns, and our state kicker refund. That is the only reason for it being a asset case. My question is has anyone ever had this kind of thing happen and does she really take all of your tax return $? It doesn't really matter, I guess its a small price to pay for what Im getting out of. Thanks so much.

10/5/07 Filed
11/19/07 341 meeting
1/18/08 Discharge date 60 day club (I think)

[a.fla]

So when you get your tax return in the spring they are going to take it? I haven't heard that one. We're filing in March and I'll bet if this is the case w/ you, they'll take ours too! Yeah, it's a small price to pay for what we're getting out of as well.

[HHM]

Actually, tax REFUNDS are commonly taken by BK trustee's. But how it works varies from state to state depending on exemptions, how the state views the tax refund, etc. In some states, the trustee simply takes the whole thing because its considered a cash asset, in other states the amount the trustee gets is prorated based on when you file BK. (i.e. if you file in Nov 1..the trustee gets that share of your refund that covers Jan-Oct 31, you get to keep that share of the refund for Nov-Dec).

[JollyGG]

Yea, we had ours taken. We were able to cover most of it with exemptions but we lost a few hundread dollars of it.

[Lindsay]

How do they get the refund? Does the IRS send it directly to the trustee or do you bring the check to them and sign it over? If you file in January or February, do they go after the current years refund?

[PaKettle]

We just had our 341 hearing this morning. Everything went very well, very quick. Our case is a Asset Case because she will be taking our Tax returns, and our state kicker refund. That is the only reason for it being a asset case. My question is has anyone ever had this kind of thing happen and does she really take all of your tax return $? It doesn't really matter, I guess its a small price to pay for what Im getting out of. Thanks so much.

10/5/07 Filed
11/19/07 341 meeting
1/18/08 Discharge date 60 day club (I think)

Yes, in SOME states - not all - they can and do take tax refunds.

Our attorney said our's does not, I'm not sure exactly why.... (California exemptions?)

But my question is this: I was told here it was okay - even recommended - to raise the exemptions on my w4 in order to have more take-home pay and less of a refund. But can someone who has been told the Trustee is going to take their refund also do this, as in the case of the original poster - or would this be a no-no for them?

[DontBother]

Yes, in SOME states - not all - they can and do take tax refunds.

Our attorney said our's does not, I'm not sure exactly why.... (California exemptions?)

Funny you should mention California... My attorney also said not to worry about them taking my refund. She said that since it won't be due to me on the date of my filing (sometime this week), that it won't be included as an asset in my case... I've questioned her many times about this, due to what I've read on these forums. But she is very confident that they won't touch it. Even to the point of her not using my extra exemption $$$ to cover any part of my potential refund... I sure hope she's right!

PaK, what part of CA are you in?

[a.fla]

We're filing in FL...anyone know if they can take it from you there? We're filing in March, but waiting until the last minute to do our taxes because I"m sure we're getting $$ back.

[woohoogirl]

But my question is this: I was told here it was okay - even recommended - to raise the exemptions on my w4 in order to have more take-home pay and less of a refund. But can someone who has been told the Trustee is going to take their refund also do this, as in the case of the original poster - or would this be a no-no for them?

I did this and I haven't filed...is that okay?

[SinkingFast]

Indiana here. Northern District.

Our Trustee looks for tax refunds in excess of $1K.

One thing our attny advised was to increase our withholdings until the end of the year. Then change them back. More money in your paycheck for the rest of the year and less money for the Trustee to potentially take.

Worked for us.

Hubby jumped his withholdings up to 10. That's the max payroll said he could go and not be subject to an investigation by the IRS. Got our combined refunds down to about $600.

When we filed taxes in the spring, we asked for checks from State and Federal. Submitted our filed taxes to the Trustee. Trustee abandon our refunds, so we were allowed to deposit the checks and spend the money.

[stopthebleeding]

I usually get a good amount back like 2k and she didn't say she was taking mine. I am in so cal.

[JollyGG]

How do they get the refund? Does the IRS send it directly to the trustee or do you bring the check to them and sign it over? If you file in January or February, do they go after the current years refund?

The IRS sent ours directly to the trustee then the trustee gave us our exempt portion. My lawyer had to send her a note asking to have the exempt portion distributed to us as soon as possible. Otherwise we would have had to wait until all the other creditors were getting their check (which is around now). But, he just said we needed it for a car purchase and she mailed it to us.

[coma]

In Louisiana, Western District, they take them regardless of the amount. In Hawaii, we were able to keep a 5k return, as it was EIC and child tax credit. When we transferred our case here, I adjusted ours to break even. I think we may ge $200 back, which I'm gladly signing over to make this go away

[PaKettle]

I usually get a good amount back like 2k and she didn't say she was taking mine. I am in so cal.

In the L.A. area our attorney said the trustees do not take taxes.

Ask your attorney to be sure.

I do know that California has a big Homestead Exemption - something like $22k (you can google "bankruptcy exemptions - California" to find out the exact amount - try several to see if they match). And you can use that homestead exemption for anything you want to keep, as I understand it: cash, jewelry, coins, etc, if you are not using it for a homestead. That is my understanding - check with your attorney to be certain.

I just know that my attorney told us not to worry about how much we have in the bank on our day of filing, and not to worry about our tax return next year. Again, this is L.A., CA.

[Kristarelle]

So~ We have changed out withholding to M9, but I have heard of people getting to keep them anyways? Does anyone know why that is? So there is a small chance that I could get it back in the Spring? Not that it matters, but I'm just curious. Thanks


10/5/07 Filed Ch 7
11/19/07 341 meeting
1/18/08 Last day for objections