Tax Refund and Chapter 7

[optimuslives]

So I am past the 60 days and am now just awaiting discharge and closing of my case (assuming it happens), but have gotten some inconsistent information, and with tax time coming up here and having not filed, I'm curious as to what I should anticipate doing here.

I am expecting a refund between $1k-$2k, and at my 341 no mention was made of surrendering my tax refund to the trustee or anything like that. Should I file an extension and wait until my case is closed completely before doing my taxes, or do my taxes go automatically to the trustee even though there was no mention of it, or can I file normally and just plan on using my refund to pay my bankruptcy and divorce lawyers?

[TJR70]

I am in a similar situation. The trustee just asked how much it was and thats it. I would think if the trustee wanted it they would of asked for it right there at the 341 meeting. I am just going to wait and make sure the trustee doesnt want it.. I

was also told not to wake up the sleeping dog.

[JoeBankrupt33]

At my 341, the trustee told me that he wanted my refund. He told the guy before me that he needed to file his taxes, and the trustee would take it depending on how much it was.

Also, if they owe you money, you don't need to file an extension. The April 15 deadline is only for people who owe the govt money. If they owe you money, you have another 3 years to file and get your money.

[KT13]

Same situation here.
I've been procrastinating b/c I'm just so unsure of what to do and have been getting mixed advice.
The Trustee didn't say anything about taxes to me at the 341.
I called my BK lawyer and he said that if the trustee doesn't ask for my refund then its mine, and like TJR70 said, not to wake up the sleeping dog. I tried to contact him again to find out if I should file an extension or sit on the refund until the case is officially closed (which BTW does anyone know how long that generally takes?).
He won't return my calls or emails.

It looks like we still don't have a real answer here...other than to sit tight?
If an extension is filed... how does that prevent the trustee from still taking the money - considering the money is from this past tax year. Wouldn't they just say Hey.. when you get the $$ give it.
And what about child tax credits.. could they take my baby's money too?

My other question is this.... will any of this affect next years filing??
Especially if the case is closed in 2009?

[megtes]

Same here. I am anxiously awaiting the discharge and closing to file, but it has been over 60 days and no change with Pacer (believe me...Ive probably refreshed the screen 30 times today!!) The trustee did look into my taxes at the 341 but he seemed uniterested since they were "only 700" last year. I did exempt 1000 but my refund will be 1600 or so this year, so I guess he couldnt take much but I am being stingy and frugal now!!!

[karma]

Yeah, I am in the same boat too. We gave our trustee last year's (2007) tax refund, but almost a year after filing we are still not discharged or closed. she has made no mention of taking any potential 2008 refund (We are expecting about $6000), but we are not sure if she can ask for this refund too? Depending on that answer, we want to determine if we should get an extension, or if that wouldn't make any difference. I really do not understand though why she would be able to take it, for then wouldn't thatmean she could have any future tax refund of ours for years to come? That seems ridiculous. At what point in bankruptcy is your future refunds safe?

[StartingOver08]

Call the BK court/trustee's office to find out why

Yeah, I am in the same boat too. We gave our trustee last year's (2007) tax refund, but almost a year after filing we are still not discharged or closed. she has made no mention of taking any potential 2008 refund (We are expecting about $6000), but we are not sure if she can ask for this refund too? Depending on that answer, we want to determine if we should get an extension, or if that wouldn't make any difference. I really do not understand though why she would be able to take it, for then wouldn't thatmean she could have any future tax refund of ours for years to come? That seems ridiculous. At what point in bankruptcy is your future refunds safe?

Why don't you follow up with the court and find out when you are getting your discharge. Relief on this forum contacted the court and found out her reaffirmation was holding up the discharge and she was able to get it worked out right away. Also the AngelinaCat and Hub were waiting a while due to a marriage certificate. Just call to find out what your hold up is - a year seems like an awfully long time for a Ch 7 (unless they are selling assets of yours??)

[karma]

I think there are a few reasons we are not discharged yet. 1. The trustee did have to sell a couple of assets-done. 2. She sued a couple of our creditors-done. Now I really do not know what is holding it up anymore except for maybe the load of cases in the court system. I am going to wait a couple of more weeks and see. She did just post an interim report, which i asked for. It might tell me something on there.

[UhhhOhhh]

Same situation here.
I've been procrastinating b/c I'm just so unsure of what to do and have been getting mixed advice.
The Trustee didn't say anything about taxes to me at the 341.
I called my BK lawyer and he said that if the trustee doesn't ask for my refund then its mine, and like TJR70 said, not to wake up the sleeping dog. I tried to contact him again to find out if I should file an extension or sit on the refund until the case is officially closed (which BTW does anyone know how long that generally takes?).
He won't return my calls or emails.

It looks like we still don't have a real answer here...other than to sit tight?
If an extension is filed... how does that prevent the trustee from still taking the money - considering the money is from this past tax year. Wouldn't they just say Hey.. when you get the $$ give it.
And what about child tax credits.. could they take my baby's money too?

My other question is this.... will any of this affect next years filing??
Especially if the case is closed in 2009?

Dont spend your tax return! Thats the boat Im in at the moment. My case is now over a year since I filed, and almost a year since discharge - and the Trustee only demanded my stimulus check - didnt say anything about my 2008 taxes. My attorney told me that I wouldnt have to pay anything else. Then just a couple weeks ago I got a demand for my 2008 taxes from the Trustee (and Id already filed and spent them thinking that was ok!). When I finally was able to contact my attorney (his number had been disconnected) HE said 'yeah they told you that at the 341'. And when I told him nope... they didnt, he said 'its implied'. (whatever that means... cause how am I supposed to know something is implied????). Anyway... so DONT spend it until your case is totally closed!

[UhhhOhhh]

Yeah, I am in the same boat too. We gave our trustee last year's (2007) tax refund, but almost a year after filing we are still not discharged or closed. she has made no mention of taking any potential 2008 refund (We are expecting about $6000), but we are not sure if she can ask for this refund too? Depending on that answer, we want to determine if we should get an extension, or if that wouldn't make any difference. I really do not understand though why she would be able to take it, for then wouldn't thatmean she could have any future tax refund of ours for years to come? That seems ridiculous. At what point in bankruptcy is your future refunds safe?

Yes she can take it IF:
the refund was for any portion of the year prior to you filing the BK.
For instance if you filed june 15 2008, then she could take a prorated amount of your 2008 refund (that you are getting now this year) up to the date you filed. Anything AFTER date of filing she is not entitled to. However, what Ive learned is she can demand the entire refund and then give you back everything left after she deducts the portion she is entitled to.

[UhhhOhhh]

Same situation here.
I've been procrastinating b/c I'm just so unsure of what to do and have been getting mixed advice.
The Trustee didn't say anything about taxes to me at the 341.
I called my BK lawyer and he said that if the trustee doesn't ask for my refund then its mine, and like TJR70 said, not to wake up the sleeping dog. I tried to contact him again to find out if I should file an extension or sit on the refund until the case is officially closed (which BTW does anyone know how long that generally takes?).
He won't return my calls or emails.

It looks like we still don't have a real answer here...other than to sit tight?
If an extension is filed... how does that prevent the trustee from still taking the money - considering the money is from this past tax year. Wouldn't they just say Hey.. when you get the $$ give it.
And what about child tax credits.. could they take my baby's money too?

My other question is this.... will any of this affect next years filing??
Especially if the case is closed in 2009?

Check the exemptions for your state and if your state uses the Federal exemptions or the State exemptions
Im in Oregon and we use the State exemptions - which exempts Earned Income Credit (or any money that can be proven to originate from EIC) but not the child Tax credit. So my trustee could take the prorated amount for child tax credit but would have to let me keep the EIC portion of it.

It would affect the year up til you FILED. So if you filed in 2009, then next year they can take whatever portion of the year until you filed. If you filed in 2008 then no matter when it closes, it wouldnt affect next years taxes.

[Bassgirl]

I just had my 341. No mention was made at all about my 2008 taxes. It was over 6000. The trustee asked if we had filed taxes for the last 3 years, (2007 and back) the Lawyer handed him our tax returns. He barely glanced at mine and did not look at hubby's at all. Then he asked our lawyer if we had any assets. The lawyer said no and that was that. He told us to have a nice day.

I have spent it. But it was spent mostly on insurance, food, and bills.

FWIW
BG