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Income Tax Refund Counted as Income?

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    Income Tax Refund Counted as Income?

    I nearly have everything figured out so we can pass the means test. I had to get my taxes caught up and now any day we're going to get $7,000+ refund for 2007. Adding that to my 6 month income will surely blow the means test. Any creative ideas on a work around?

    #2
    Just because you can't pass the income part of the means test does not mean you can't based on income and expenses. I'd see how that comes out first.

    Some other options would be to wait until that falls off your last six months income or file a Chapter 13 and look to convert to a 7 later.
    Case Closed > 2/08/2010

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      #3
      I make into the six figures and have more debt than the CH13 max so it's 7 or 11 and that's would be an expensive messy nightmare. After all qualified expenses I am just on the edge of qualifying for 7. I need to figure out how to make the refund go away.

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        #4
        It will count as income. You will have to wait six months to average it out.

        You can spend it on necessities so it won't count as an asset though.

        Since high income chapter 7's get more scrutiny save any receipts when you spend the refund.
        You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

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          #5
          You will more than likely fail the means test with or without the refund if you're a high income earner,

          It really is an issue of what your Schedules I and J reflect. You wouldn't include that "income" on Schedule I because it's not current.

          The means test isn't the determining factor in qualifying for a Chapter 7. It is a tool used to alert the court to possible abuse which is always more likely with a high income earner with the debt load you have.
          Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

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            #6
            Originally posted by OhioFiler View Post
            You will more than likely fail the means test with or without the refund if you're a high income earner,

            It really is an issue of what your Schedules I and J reflect. You wouldn't include that "income" on Schedule I because it's not current.

            The means test isn't the determining factor in qualifying for a Chapter 7. It is a tool used to alert the court to possible abuse which is always more likely with a high income earner with the debt load you have.
            Many high income filers pass the means test. I passed the means test when I lived in nyc due to my outrageous expenses.

            I am not sure why OhioFiler thinks that high income earners are more likely to abuse the system, but certainly that is what the trustees and US trustees think because high income filers get much closer scrutiny, and the changes in the bankruptcy laws were geared towards high income filers.
            You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

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              #7
              Originally posted by backtoschool View Post
              Many high income filers pass the means test. I passed the means test when I lived in nyc due to my outrageous expenses.

              I am not sure why OhioFiler thinks that high income earners are more likely to abuse the system, but certainly that is what the trustees and US trustees think because high income filers get much closer scrutiny, and the changes in the bankruptcy laws were geared towards high income filers.
              I coulda been a trustee!

              You didn't pass the means test in NYC. You filed in Michigan not NY.
              Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

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                #8
                Originally posted by OhioFiler View Post
                I coulda been a trustee!

                You didn't pass the means test in NYC. You filed in Michigan not NY.
                I almost filed a year before I actually filed and even hired a lawyer, but she said that even though I passed the means test, my income was too high and I would be booted into a 100% chap 13. So I decided not to file at that time.
                You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

                Comment


                  #9
                  Originally posted by backtoschool View Post
                  I almost filed a year before I actually filed and even hired a lawyer, but she said that even though I passed the means test, my income was too high and I would be booted into a 100% chap 13. So I decided not to file at that time.
                  wiki wiki
                  Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

                  Comment

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