Confused. Please give me your thoughts

[mama2three]

During our initial consultation our atty told us we would probably have to turn over our 2009 tax return, as we expect around $6,000 back. We were able to exempt $2,000 of it when we filed.

We had our 341 on Sept 2 and the Trustee never mentioned our return and the same day entered a report of no distribution and requested to be relieved of his duties as Trustee. Since he didn't mention the return and filed the report we thought we may get to keep the return in full.

However, today we got a letter from our attorney's office stating we would have to mail our 2009 refund to the Trustee or risk having our discharge revoked and debts reinstated. The letter doesn't mention the $2,000 exemption.

So now we are confused on whether we actually have to turn over the refund. Does the Trustee generally issue something requesting it?

If we do owe it, do we just write a check to the Trustee for the amount of the refund, less the $2,000 exemption?

Please give me your thoughts as I am lost.

Thanks

[justbroke]

I'm confused too. I await the answers which are sure to follow. Now, the Trustee can change their mind and withdraw that report, but this may be the first I've read that an actual report of no distribution was issued (along with the Trustee withdrawing themselves)... and then the attorney saying you do owe it.

I would get back with your attorney and ask him/her to authenticate the need that you are required to surrender your tax refund... in full and/or less the $2K exemption.

[NewLifeAhead]

Yes, please keep us updated with this. As JB said, contact your lawyer to provide you with something in writing from the Trustee that states you have to turn in this refund. From what most have written on this forum, the Trustee would have already notified you (before or at your 341) if they wanted the refund.

I hope you just have an overly cautious lawyer and you can keep it.

[mama2three]

Thanks. I am really hoping we get to keep it as well. I sent my attorney an email two days ago and haven't heard back, so if she doesn't respond by this afternoon I may call the office.

My understanding from reading these boards was that if you weren't notified by the Trustee or at the 341 then it was yours to keep. But I will keep you all posted on what ends up happening and what my atty says.

[mama2three]

Attorney's Response

I justgot an email back from my attorney. This is what she said

"Normally the trustee sends a letter out end of Dec, beginning of January indicating that you need to provide him with a copy of your tax return and refund. You received a large refund last year, so I am thinking you will get one of the letters. Once filed, you mail the return to trustee and make sure the bk number is on it. Do not have the refund deposited to your bank a/c,. Once you receive the check, you mail the entie check to t'ee and he will refund you the $2,000 which was exempted. The trustee normally files a no asset case, once return , if large enough to administer, he will reopen as an asset case and distibute. If tax return is minimal, he may return the entire amount to you."

[justbroke]

Interesting.

[NewLifeAhead]

Well, here's to wishing a No Letter From Trustee Christmas!!!!!!!!!

Good luck.

[liz417]

Hmmmm.

Well, here's hoping that you don't hear from the Trustee this holiday....

[mama2three]

Yes. We are going to be keeping our fingers crossed.

I had never heard of a case being declared a no asset, discharged and closed, and then reopened to collect an asset and then closed again.

Weird.

Oh well. Here's hoping for a quiet December

[killinstinct]

I hate to say it, but DO IT!! That's why you paid your atty the big $$$.

Look at it this way, it would be much more expensive to have your case dismissed.

[music12]

this is SO weird. it's the least transparent system i can imagine. why can't they be open and honest about it? how can they file a no asset report knowing there are assets? imagine if a debtor did that, they'd be considered fraudulent.

[aces67]

That is odd. And really I wonder how long it takes the trustee to refund your $2K. That's crazy.

Hopefully you won't get a letter.

[UhhhOhhh]

I justgot an email back from my attorney. This is what she said

"Normally the trustee sends a letter out end of Dec, beginning of January indicating that you need to provide him with a copy of your tax return and refund. You received a large refund last year, so I am thinking you will get one of the letters. Once filed, you mail the return to trustee and make sure the bk number is on it. Do not have the refund deposited to your bank a/c,. Once you receive the check, you mail the entie check to t'ee and he will refund you the $2,000 which was exempted. The trustee normally files a no asset case, once return , if large enough to administer, he will reopen as an asset case and distibute. If tax return is minimal, he may return the entire amount to you."

Im sorry, but this makes absolutely no sense.
From everything Ive read on here and other boards, once the case has been discharged and report of no distribution and closed, then its done. Thats what the report of no distribution is... the Trustee is saying there nothing TO distribute. Also.. what I understand from other posts is that there are few reasons a Trustee would REopen a closed case and I honestly dont think with the way the courts are backed up that the trustee is going to close like that and then reopen 'as a general practice' - the way your attorney is suggesting he does it. It would be a waste of time and energy.

My case has been open for over a year - the trustee hasnt filed the no distribution BECAUSE he was waiting for my tax return and he did send me a letter asking for it (altho it was all exempt so I didnt have to send it to him).

I would ask another attorney in Las Vegas - as maybe thats the way the Las Vegas Trustee works... however, it really doesnt make any sense.

[music12]

also, i don't believe a trustee can reopen a case that's been discharged and closed in order to dismiss it! and based on what? assets that the trustee knew about and has certified he is abandoning? so your lawyer's threats are just way too strange. wouldn't surprise me if your lawyer and trustee are trying to get free money...

[backtoschool]

If you go to your bankruptcy district's local website, there should be a section on "local rules". In this section you should be able to find out if tax returns automatically become property of the trustee.

In my district they are not automatically taken, ie the trustee has to specifically ask for a tax return. In some districts, tax returns automatically become property of the bankruptcy estate. In the local rules section you will find out what your district's policy is.