If we file taxes individually this year will trustee object?

[lalap123]

Okay, long story but I'll try to whittle it down. I filed ch. 7 individually on 2/16/10 and have used all of my exemptions up and then some. My attorney told me not to file my taxes until after the 341 b/c trustee *may* not mention it at all (I'm in northern district of GA). She said to tell him at the 341 (if asked) that I have not filed and don't know how much my refund might be (even though my last two years' returns show pretty substantial refunds).

I understand that the trustee would only take half of the refund anyway, since half would be entitled to my husband. My 341 is 3/15/10, so theoretically I guess I could file my taxes on 3/16 and expect to keep it all if the trustee doesn't specifically ask for it, correct? My dilemma is that we really need money to pay a shortage in our escrow for our mortgage by 4/1. I'm debating whether or not to just go ahead and file taxes in order to use the half of the refund that will be my husband's and then be prepared for the trustee to take my half when I have to tell him at the 341 that I have filed and received the money...

So, to get to my question, what if my husband and I filed our taxes individually this year so that he could go ahead and send in his return, thereby getting his portion of the refund, then I could just tell the trustee at the 341 honestly that I haven't filed and don't know how much my refund might be. If he lets me slide then I haven't lost anything, but if he wants the refund then we would have at least gotten some of the money back to use on necessary expenses now.

Does this make sense? Is it in any way deceitful or illegal to change the way we file taxes just this year or does it look like I'm trying to "get around" the system?

[lovebirds]

Would paying your escrow shortage be a preferential payment?

[lalap123]

Shouldn't be...

It shouldn't be, since the bk petition has already been filed. Preferential payments only apply to those payments made prior to filing, but probably the more important thing is that this payment would be to a secured creditor and not an unsecured creditor (plus the mortgage is only in my husband's name).

[mercedesc350]

My case had a similar situation; I filed in Oct '08, wife did not. Mortgage was in wife's name only. Each year for several years we had filed jointly, generating refunds in the $2k area. However, all that was a result of my wife's mortgage interest and overwitholding. If we were to file seperately, she would still get a nice(r) refund; I would turn out owing. At the 341 the trustee asked my intention for filing and I told her that we were filing seperately for 2008. Trustee was none to happy. She had their staff accountant essentially do a version of our taxes for us, and determined that we'd actually get an even bigger refund! My wife wanted nothing to do with paying off my debts, and we were definately having some "marriage issues" over finances. She refused to cooperate at all, made it clear she was filing by herself and not subjecting "her" refund to the trustee and my debts. She even wrote a letter to them saying essentially that she did not file BK, and wasn't planning on being subjected to the situation. My attorney basically dared them to drag my wife in to court and demand that she "play ball" when she wasn't filed. The backed off and my case, no asset, was discharged and closed once I filed my taxes (showing I owed money).

[lalap123]

Thanks for your reply. Where do you live, if you don't mind my asking? I didn't think about it until after I read your response, but my husband is also the only one on the mortgage to our house (although I'm on the deed). So theoretically you are saying that I could argue that less than one-half of the refund should be mine for the trustee to take? When you figure in the home exemption and the fact that I only contributed around a third of the income, that would make sense to me.

I'm going to run the numbers sometime over the weekend to see what it would look like if we were to file separately. If it looks pretty good then I might just go ahead and have my husband file his. The trustee can only touch assets that are in my name, right? So that would mean that any refund that my husband might get would be his to spend as he wanted?

[mercedesc350]

I live in Utah. My wife got "her" refund for 2008 after filing on her own. Of course since my filings (state and federal) both turned out with me owing money, I had to work out payments for both (less than $1000 total). The trustee was not happy over all this, but from what I understood there was really nothing they could do to take my non-filing spouse's tax refund. They did, as mentioned, try to say that my wife over-withheld taxes. Trustee did make "an indication" that they felt I could be in a Ch 13 and pay atleast some of my debt if my wife withheld less. Again, once my wife made it clear she wasn't going to "play ball," there really wasn't much they could do.