Amount Exempted vs. Actual Amount of Tax Refund

[onthefence]

I just found out that we are getting a federal tax refund of about $3k. We filed our no asset, below the median CH7 in Sept '10, were discharged in Dec '10, and closed in Jan '11. My question is that in our bk petition, we only allowed for an exemption of $1500 for our tax refund - is this going to be a problem? Should we wait until the 6 mo mark to file? Would that even matter? TIA.

[daylate]

I don't know the answer but did you have exemptions left over that had you known you could have bumped up the amount exempted? if so it would seem logical that there should be no problem.
Other thing to consider is that by filing in September only 3/4 (9/12) of it was part of your bk estate. That cuts it to 2250 so now you are only over by 750.
Hopefully some others will add to discussion.

[onthefence]

Thanks for the reply, daylate. Yep, I am sure that we had some wiggle room that would have allowed us to exempt more. Also, I did not think about using only 3/4 of the amount. The trustee never mentioned our taxes or possible refund, so I am assuming that we are ok?

[tcreegan]

Hi onthefence,

The trustee never mentioned our taxes or possible refund, so I am assuming that we are ok? ...you're discharged and closed. Sounds like the larger refund was unexpected, not planned. To change something in your BK case, it has to be reopened = major hassle. The trustee wasn't interested in your taxes.

My vote is you're cleared for take-off. Dump it in the bank vault... (did I mention you were discharged and closed?)

And the 6-months after the BK is for inheritance-type stuff, not a tax refund. If debee is around she will know the details.

Congratulations on the windfall and the finished BK case!

Tom in Colo