Secured vs unsecured creditors

[grnerd]

I have a question about secured vs. unsecured creditors. Since I lost my house to foreclosure, and I do not own a car, I do not have anyone to list on my schedule d. Not complaining about that, but it raises the question of will the trustee pay off unsecured creditors with things I cannot exempt?

I don't have much of anything property-wise, and everything I do have I think I can exempt. I am trying to figure out how to protect my tax refund here in Michigan. I have read here that I can add it to my homestead exemption if I have room, and since I do not have a homestead I have plenty of room. I hope that is the case because I desparately need to get that money.

[TEW]

So file your tax return get the money and spend it before you file

[Tbornetun]

If you have room in your homestead exemption you have nothing to worry about, it will be exempt.

[catleg]

Don't rush to file. Take your time. Get the refund first and spend it.

[optimistic1]

You could apply your refund to the next years tax liability.

[Tbornetun]

You could apply your refund to the next years tax liability.

We had a client do exactly that and the Trustee saw it as an asset. Even though they did owe the amount plus some on the following years taxes. She made them pay her every dime that the IRS was "holding" for them to distribute to creditors.

File taxes, spend the money (save receipts), file BK

Or, if you are able to exempt it, do that instead and get the ball rolling.

[optimistic1]

Pesky Trustee, well, it was an idea. I figured that they would catch it though.

[bkchap7filer]

I didn't think you could use the homestead exemption at all if you didn't have a home that you owned?? At least that is how I thought it was in MO. We rent a home (always current, didn't list landlord as creditor so they don't know about the filing), so didn't use the homestead exemption for anything and I thought we were unable to fill that amount of money with other "stuff" in its absence. Sort of like, if you have a home you can use the exemption and use other stuff to fill it up but if you don't own a home you can't use it at all.

Is this right? Maybe it varies by state??

[catleg]

MO is tough, there is no federal exemption just state so it is different.

[grnerd]

So file your tax return get the money and spend it before you file

I have been sued and there is a garnishment order on my taxes. I want to file my bankruptcy first so they can't take that money.

[grnerd]

I didn't think you could use the homestead exemption at all if you didn't have a home that you owned?? At least that is how I thought it was in MO. We rent a home (always current, didn't list landlord as creditor so they don't know about the filing), so didn't use the homestead exemption for anything and I thought we were unable to fill that amount of money with other "stuff" in its absence. Sort of like, if you have a home you can use the exemption and use other stuff to fill it up but if you don't own a home you can't use it at all.

Is this right? Maybe it varies by state??

Ugh... that hurts.

[grnerd]

I talked with someone today that suggested I list my tax refund as income to protect it. I am well below the means test. Has anyone tried this?

[TEW]

I have been sued and there is a garnishment order on my taxes. I want to file my bankruptcy first so they can't take that money.

the trustee may take it then