Letter From Trustee

[wellspring]

received a letter from my Trustee today; basically how much of my income tax return he was going to take. Now from the letter: "These funds are to be sent to your attorney to be held in escrow subject to #2 below:
2. Note: There is the possibility of a rebate that will be passed by Congress for the 2007 tax year. If this is passed (the amount is believed to be $600.00-$2000.00) these funds will be property of the estate and will need to be forwarded to the Trustee. They are not the debtors to keep.

OK..now I am fine with that. Take it, it's still better to give it up than put up with the BS that I've been through for the past few years with creditors and all that. My question is why can he take that? I thought that any funds after filing were yours to keep? I've tried calling my attorney, but he's in court today. I'm waiting for him to call me back. Any input from anyone?

[jp2861]

I believe any money that you "know" you are due to receive within the next 6 months is part of your estate. It's the trustees decision if the amount is worth turning over.

[monkatom]

could you refuse the refund as if you receive it and have to give it to the trustee you still need to pay the tax next year correct??

[BearChaser303]

2. Note: There is the possibility of a rebate that will be passed by Congress for the 2007 tax year. If this is passed (the amount is believed to be $600.00-$2000.00) these funds will be property of the estate and will need to be forwarded to the Trustee. They are not the debtors to keep.

Not sure if it has anything to do with it, but I'm just curious when you filed and when was your 341 meeting? I have not yet received any such letter about the rebate. However at the 341 meeting I did have to sign a stipulation about turning over 2007 tax returns and refunds. SO, I wonder if this also includes the rebate check...

[kiddles]

Be sure to talk to your attorney - the BK estate is created at the time of filing, so anything you know or suspected you might get at the time you filed could be considered part of the BK estate (including the normal tax refund most people get), but anything after the date of filing that you knew nothing about at the time of filing should not be considered part of the estate.

[yoyoma51]

Isn't it interesting that whether or not to take peoples tax refund is up to the trustee...who gets to put 25% of it in his or her pocket.

We are expecting a refund in excess of $5000 this year, plus the $1200 "advance" coming this spring.

Our lawyer (who is also a trustee) said we have nothing to worry about as our trustee doesn't take refunds.

It is a shame that there is such disparity in the way refunds are treated.

[BearChaser303]

Be sure to talk to your attorney - the BK estate is created at the time of filing, so anything you know or suspected you might get at the time you filed could be considered part of the BK estate (including the normal tax refund most people get), but anything after the date of filing that you knew nothing about at the time of filing should not be considered part of the estate.

Thats what I was thinking too. And since I filed on 12-10-07, there was no talk of the rebate at that time which should mean it is mine to keep.

[Cali]

Isn't it interesting that whether or not to take peoples tax refund is up to the trustee...who gets to put 25% of it in his or her pocket.

We are expecting a refund in excess of $5000 this year, plus the $1200 "advance" coming this spring.

Our lawyer (who is also a trustee) said we have nothing to worry about as our trustee doesn't take refunds.

It is a shame that there is such disparity in the way refunds are treated.

You like getting your money at the end of the year instead of upping your exemptions to get it during the year?(just curious)

[wellspring]

Be sure to talk to your attorney - the BK estate is created at the time of filing, so anything you know or suspected you might get at the time you filed could be considered part of the BK estate (including the normal tax refund most people get), but anything after the date of filing that you knew nothing about at the time of filing should not be considered part of the estate.

I filed on 6/24/2007, 341 on 7/24/2007 discharged 10/02/2007, but not closed because he wanted to see my tax refund. He's getting a little of it, but not too much. I'm still waiting for my attorney, the girl said she had no idea how long he would be in court today, but that she would leave him a message to call me.

[TomBrady]

Not to be dense here but I just dont understand this idea that anything in the future that you may "know" about can be seized. First of all how long in the future does this apply I mean chances are pretty good that I will be getting a tax return next year, and the year after that also can he take those too? I also know that I am going to be receiving a paycheck a week after Bankruptcy can he take that too? Somewhere there has to be a line. This just seems ridiculous, this "advance" from Bush has not even made it through the senate yet so how can you "know" that you are going to receive it. Even the trustee doesnt know since he puts down a vague amount 600-1200. This is ridiculous if you ask me.

EDIT:

Sorry I read earlier that someone stated 6 mo after bankruptcy (confidently covers tax returns in both directions). To me the fact that they are even sending out letters like this is just proof that this "advance" is to bail out the lenders and not the people. IMHO this is just a politically popular way to transfer 100 Billion $ into creditors accounts. Studies show that more than 80% of people plan on applying the money to debt (thus the helping the creditor’s part). The just cant stand to let the few BK people actually have the refund. How come we are all bums because when we cant pay the bills but when this happens to the creditors the government is falling all over itself to help them.

Sorry for venting.... This just really pisses me off.

[ameliabedilia]

I think they think of it like the whole inheritance thing-maybe you might have a great aunt kick the bucket, since she's 90 years old. Yet if you go to the casino after you file and win big then it's all yours. It's really crappy!

[yoyoma51]

First, the rebate it has passed the senate and has been sent to our resident of the White House for his signature.

Second, when we had our 341, our trustee told us we had to report to him any inheritance (both our fathers are older and not in good health) for 6 months from the date we file, no the discharge.

[dp1969]

I'm sorry but our lawyer did not want to hear anything of a "possible" refund. We owe my parents in excess of $15k and any money I receive HAS to go to them. We have a contract, in writing, that states this.
What is the trutee going to think of that??

BTW- Our 341 is on 2/19

If it is 6 months, then suppose I don't file until August and just pay the penalties? And when you are saying that you don't "know" of any return coming to you, shouldn't that be just that?

[yoyoma51]

Cali-

Our refund is due to a loss at our former business, not because of our payroll exemptions.

[gophermn]

It is a shame that there is such disparity in the way refunds are treated.

Interesting huh? This BK is done via Federally US DISTRICT COURT, so one would assume there should be little if any gray area of one trustee saying one thing and another saying something different.