Just Had 341 - Releived (sort of)

[JoeBankrupt33]

I filed Pro Se, and had a few surprises at my 341 in Colorado.

The trustee asked me to surrender my tax refund. I thought that it was going to be exempt because it was due to a child tax credit. The law in Colorado says that refunds attributable to eic or child tax credits are exempt. I tried to find case law for this, but couldn't. Apparently, it wasn't decided until last August. They handed me the case law. According to the oppinion, only child tax credits that are "additional child tax credits" and are refundable beyond what you paid in are exempt.

So...$1640 gone. Then, because the refund was high enough for their interest, they asked me to return $422 in earned, but unpaid wages (after a 75% reduction due to exemption). Then, they asked me for the entire amount that was in our checking accounts on the day we filed ($128). I had the sense to ask that they reduce that by 75% because it was all from wages (and there is supporting Colorado case law that I had with me).

All told, I owe the trustee $1640 + 422 + 32 = $2094.

Thank goodness that I read this forum, and I have not spent my tax refund.

But, it's not all bad. I owe Colorado income tax from previous years and for 2008 in the amount of $1822. This is where the money was going to go if I exempted the retun anyhow. But...the trustee takes 25% of the $2094, leaving $1570 to pay to Colorado (my only priority claim). So, I will still owe Colorado $252 and no other creditor will get paid - so let them file claims - ha ha!

My wife said that a bunch of people in the room were getting a kick out of me and my arguing and they were chuckling more when I told the trustee that I design slot machines for a living.

So, word to the wise in Colorado, file right after the end of a pay period, so your unpaid wages are the lowest.

[pcn]

Was your refund fair game because it was recent? Is there a time limit on how far back they can go to get it? Thanks, and I'll be searching the forum about tax refunds now.

[kathy4530050]

Wow--this seems pretty aggressive to me. Is this normal?? They didn't ask you to expose the contents of your wallet, did they? I admire you for doing this on your own-I would be terrified to go the pro se route!

[Mi Bankruptcy]

Did you exempt your tax return? You could have exempted it as a anticipated return of 2k.

[JoeBankrupt33]

I tried to exempt it. In CO, there is no wildcard, but I thought I had it covered because of the child tax credit. Anyhow, he shot me down and handed me the case law. The refund was fair game (to my chagrin), and it was a refund for 2008 tax year. I filed my taxes after I filed BK. So, another lesson learned - don't file until you have received and spent your refund on necessary items.

To answer the "how far back" question for taxes - they can try to take any refund that is due to you. So, if you haven't filed for 2007, but are still due a refund, they will try to take it. But, if you filed 2007 on time and spent the money last year, then they can't take it.

The trustee was only aggressive to me. Everybody else spent 3 minutes up there, except for one guy who had old tax debt. The trustee pretty much called out the lawyer (who seemed to be a tool) because he did not request the discharge of the old taxes.

I would have gladly given him the $2 I had in my pocket if he had asked me to empty them.

[Mi Bankruptcy]

OK. I filed in Nov. I explicitly exempted 3K for me and 3k for my wife. We had our 341 in Jan and they didn't say anything. So, we already received and spent it. Hope they don't want it back.. LOL

[AngelinaCat]

It seems to depend on the district and trustee. We have three different districts in Florida and from what I have read posted by some of the other Florida posters, this seems to be normal practice.

[ready2puke]

The trustee gets 25%? I think in Ca. they only get 10% The 25% will make the trustees start to drool when they see something tasty

[EricaCallaha]

Colorado is very similar to Utah in the exemptions and case law regarding child tax credit.

Good for you for sticking up for yourself.

[StartingOver08]

The trustee gets 25%? I think in Ca. they only get 10% The 25% will make the trustees start to drool when they see something tasty

R2P, I think the OP is referring to what the Trustee is allowed to take of the OP's earned income. For example, if you have a garnishment it is limited to 25% of the income. I hope he was not saying that the Trustee's FEE is 25% - that's huge! And if it is 25% you know the other Trustees in other districts will look to increase their fee!

[JoeBankrupt33]

Actually, I was referring to the trustee's cut. I have read that it cannot exceed 25% of the first $5000 in assets, then it goes down from there.

I would doubt if the trustee charges less than what's allowed, but who knows.

[StartingOver08]

Wow! Glad you cleared that up...that is quite a large fee. Ours is 10% here.

[UpsideDownMI]

What actually constitutes earned but unpaid wages? If you file the day before a payday, can the trustee claim a prorated portion of the check that you receive the day after you file? Just curious, as I had not thought of this as a possible outcome.

[JoeBankrupt33]

I don't know if it works this way everywhere, but I asked to reveiw their calculations.

They didn't care at all when my payday was. The only thing they looked at was the beginning and end of the pay period.

They counted how many days were in the pay period before (not including) the day I filed (which was 11). They divided this by the total number of days in the pay period (in my case 14). They took that and multiplied by my total earnings in the pay period minus required withholdings (they did not subtract medical insurance or 401k).

For my wife, she just started a pay period and had only 1 day count against us. But, she doesn't earn much - it would have been better if I filed the very next day after the end of the pay period, which is a few days before I get paid.

[MiSSMaGoo]

Who was your trustee? I go tomorrow for my 341 in CO. Im super nervous. I filed taxes on Jan 16th and received money on Jan 30th and filed bankrupt on Feb 5th. My refund was large and am super nervous about what they will say....