Confused. Please give me your thoughts

[killinstinct]

In most cases, aren't most tax returns covered by exemptions anyway? No one has said anything about ours in our case.

[backtoschool]

In most cases, aren't most tax returns covered by exemptions anyway? No one has said anything about ours in our case.

Well some people get large tax returns that exemptions wouldn't cover. If your trustee didn't say anything about yours then you are fine.

[justbroke]

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.

Actually, I have found that "local rules" from the Court, do not cover things such as tax returns or tax refunds. The "local rules" section of the District's Site are the District's additional parameters around the Federal Rules of Bankruptcy Procedure (FRBP) and, as such, are actually numbered exactly the same way.

Keeping tax refunds and/or requiring tax returns, is generally a United State Trustee (UST) rule. I like to call the UST's rules, local customs, to distinguish them from the Bankruptcy Rules (FRBP). You may be able to find out from your Trustee's website, but I wouldn't hold my breath.

[justbroke]

In most cases, aren't most tax returns covered by exemptions anyway? No one has said anything about ours in our case.

They are not covered, unless you actually declare the tax on Schedule B/C and list the section of law that allows you to "cover" the tax. Many attorneys and especially pro se filers, actually forget to exempt the "future" tax refund!

[backtoschool]

Actually, I have found that "local rules" from the Court, do not cover things such as tax returns or tax refunds. The "local rules" section of the District's Site are the District's additional parameters around the Federal Rules of Bankruptcy Procedure (FRBP) and, as such, are actually numbered exactly the same way.

Keeping tax refunds and/or requiring tax returns, is generally a United State Trustee (UST) rule. I like to call the UST's rules, local customs, to distinguish them from the Bankruptcy Rules (FRBP). You may be able to find out from your Trustee's website, but I wouldn't hold my breath.

Sorry for the generalization! My district had specific directions on tax returns in the local rules section, so I just assumed that was the norm.

[justbroke]

Sorry for the generalization! My district had specific directions on tax returns in the local rules section, so I just assumed that was the norm.

I LIKE YOUR DISTRICT! I wish all of them had clear and concise rules listed in one location. It's a shame really. I hate having to look in several different places (Trustee, District, Regional UST Website) for things!

[killinstinct]

They are not covered, unless you actually declare the tax on Schedule B/C and list the section of law that allows you to "cover" the tax. Many attorneys and especially pro se filers, actually forget to exempt the "future" tax refund!

Thanks. I'll look mine up. Our atty told us we had tons of room with exemptions (it was like tens of thousands of dollars, don't remember exact amount) because of our house surrender. Something tells me it won't be an issue. I'm not expecting much back next year anyway...we won't have that huge mortgage interest deduction


K...read through my local rules. Pretty freaking dry stuff (only 49 pages though). Not one word on tax refunds. I guess I'll just ask my atty next time I talk to him.

[mama2three]

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.

That's why I am so confused. I thought if there were assets to distribute the trustee would hold off on filing the distribution report because the creditors would be getting something. Filing the report of no distribution just seems like it would be all around confusing if he were just to reopen the case in a couple of months to get the refund and then distribute some money to the creditors who aren't expecting anything because of the report of no distribution.

I thought if we had to turn over our refund we would be notified and our case would just be held open until it was distributed.

The report he filed right after our 341 said our total debts were being discharged without payment on any claims.

I guess we will see in December

[music12]

when december comes, i would be very careful with that lawyer of yours. don't give him anything unless you actually receive a letter from the trustee. and even then, i would ask the court clerk what to do - i just don't think a trustee is allowed to reopen a case to "adminster" assets he knew about before filing the no distribution report. once your case is closed, all assets are deemed adminstered unless you hid them, and you didn't.

[mama2three]

when december comes, i would be very careful with that lawyer of yours. don't give him anything unless you actually receive a letter from the trustee. and even then, i would ask the court clerk what to do - i just don't think a trustee is allowed to reopen a case to "adminster" assets he knew about before filing the no distribution report. once your case is closed, all assets are deemed adminstered unless you hid them, and you didn't.

Thanks Music. All the replies I have gotten here seem to be in line with my understanding. We definitely did not hide the fact we would get a large return, we provided our last two years returns and listed the return on our petition and exempted $2,000 of it. We were advised by our lawyer to send the check directly to the trustee and not through her so hopefully she is on the up. Before I send anything though, I definitely want something in writing from the trustee requesting it.

[mama2three]

Trustee's report

FYI, and to make sure I was reading this right, here is the document filed by the Trustee on the same day as our 341.

Chapter 7 Trustee's Report of No Distribution: I, *****, having been appointed trustee of the estate of the above-named debtor(s), report that I have neither received any property nor paid any money on account of this estate; that I have made a diligent inquiry into the financial affairs of the debtor(s) and the location of the property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law. Pursuant to Fed R Bank P 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. I request that I be discharged from any further duties as trustee. Key information about this case as reported in schedules filed by the debtor(s) or otherwise found in the case record: This case was pending for 1 months. Assets Abandoned: $ 157417.00, Assets Exempt: $ 13785.00, Claims Scheduled: $ 390478.00, Claims Asserted: Not Applicable, Claims scheduled to be discharged without payment: $ 390478.00. (****) (Entered: 09/04/2009)

Thanks again.

[Chowder]

This is the weird part. -from your Attorney
"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."

As bizarre as it sounds this may be SOP for your Trustee.

[music12]

SOP or not, it smells very fishy. why falsely certify that the estate has been fully administered? "certify" is not much different from pains and penalties of perjury, and they are saying that making a false certification is standard. this does not make me trust the system very much.

[justbroke]

Pursuant to Fed R Bank P 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. I request that I be discharged from any further duties as trustee

You know what? I don't know how any Trustee can get away with "certify(ing) that the estate... has been fully administered", only to re-open it later. If they know it's not fully-administered (vis-a-vis a tax refund), they should not close it.

This sounds like a case where someone should bring forth a complaint against the U.S. Trustee!

Any volunteers?

SOP or not, it smells very fishy. why falsely certify that the estate has been fully administered? "certify" is not much different from pains and penalties of perjury, and they are saying that making a false certification is standard. this does not make me trust the system very much.

We think too much alike. Well, we process information similarly. That's scary!

[wildebeast]

I guess I was lucky! We got almost $12,000 back on our tax return this year. We received it in February and spent all of it on legit purchases. Mostly household goods, built a deck, installed safety windows for kids, etc. We waited until July to file and at our 341 meeting the trustee only asked if we received the refund months before filing. He didn't even care about it. Goes to show you, you never know what'll happen.