ARGGHH....can you read this and tell me what it means?

[Jacey]

I just found this in PACER...does this mean that I owe them $1,620 or my entire refund amount? (I had calculated that I would owe them $1,000ish). My attorney really screwed the pooch on this one. If we had filed when I asked him to file, this wouldn't have been an issue. Also, my 341 was just last Wednesday and I faxed all the documents to the attorney that afternoon. It may just be the language, but it sounds like I'm noncompliant!

TRUSTEE’S OBJECTION TO EXEMPTIONS AND MOTION
FOR TURNOVER OF TAX RETURNS AND NON-EXEMPTIBLE ASSETS
Comes now John T. Lee, Trustee herein, and for his Objection and Motion,
respectfully states to the Court as follows:
1. That the maximum exemption the Debtors have under 11 U.S.C. §522(d)(5) is
$23,950.00; that they have claimed assets as exempt under this section valued at $25,570.00; that
your Trustee objects to Debtors’ claimed exemptions under this statute for the reason that they
have claimed assets valued at $1,620.00 in excess of that permitted by law.
2. That your Trustee requests that the Court order the Debtors to turn over the
non-exemptible assets mentioned in the previous paragraph.
3. The Trustee has requested that the Debtors provide him with copies of their
2010 state and federal income tax returns, but they have not done so; that they advised your
Trustee at the creditors’ meeting held in this case on March 2, 2011 that they were entitled to
refunds of $8,575.00, although your Trustee has not verified that amount; that he requests that
the Court order the Debtors to turn over to the Trustee true and correct copies of their 2010 state
and federal income tax returns and all attachments and schedules thereto, and further find that
any refunds they may be entitled to receive are non-exemptible and order them to turn over their
refunds to the Trustee for administration as property of the Estate.
WHEREFORE, John T. Lee, your Trustee herein, prays that the Court enter an
Order sustaining his Objection to Debtors’ exemption for the reasons set forth above, and order
the Debtors to turn over their non-exemptible assets to him for administration; that the Court
further order the Debtors to turn over to the Trustee true and correct copies of their 2010 federal
and state income tax returns, with all attachments and schedules, as well as any income tax
refunds they may be entitled to receive; and for all other relief to which he may be entitled.

[Exployer1234]

It does appear you will have to pay the 1620 because you are over the allowed exemptions.

Next the Trustee is wanting to review your tax return to see of an additional 8575 is owed.

Personally I would not expect to keep my tax refund if I were you. From what I have read it appears you may owe the Trustee a little over 10K. This can be in the form of assets or money.

[Jacey]

8575 was the entire amount of both my state and federal refunds...we had listed $7500 as exempt, which was fine according to my lawyer. I knew I would owe them the rest. I already have my refund, but I was hoping to pay for some neglected maintenance on cars and house.

[Exployer1234]

You can petition the Trustee to make payments on the amount I believe. If you are a chapter 7 case it will delay your discharge date.

I understand about wanting to pay for neglected maintenance on the cars and house. My car is in desperate need of some neglected maintenance. It took everything I had last year to pay for my BK. I just keep putting off the repairs, but I am going to have to break down and just get the repairs down.

[backtoschool]

The trustee is saying that you cannot spend your refund and must turn it over to him while he looks at your tax returns, exemptions, etc and figures out if the tax refund is exemptable and to what extent you can exempt it and what you will have to turn over.

[daylate]

Just a thought/question - is it possible to file an amendment to up the exemption for your refund and leave $1600 of "stuff' non-exempt? Like stuff he wouldn't want?

[csonly]

To me, it sounds like the entire amt may be in jeopardy. I would not spend a penny of that until he makes his determination on how much he wants. Personally, I would want to pay it and move forward without that hanging over my head. If he only wants $1000 or $1600, that would be great and you get to keep the rest, but if he wants it all, I would not want to be in the position of having to come up with that large amount. I think he could have given you more time to get the returns to him, a week seems unreasonable. I hope this works out in your favor, please keep us posted.

[Jacey]

I spent a bit of it, but not enough that I can't turn it over to him. My attorney thought it was mostly exempt, but that I would have to turn over $1,000ish. I'm still waiting for a return phone call from him to see what he says. I can't understand how the exemption for the entire return would be completely wiped out...it's either exempt or it isn't, so it seems that the law would say that I pay them the amount over the exemption?

[daylate]

I agree with only the excess being non-exempt. But, unfortunately, that is just a common sense opinion.

[discombob1]

I really hope one of the legal eagles chime in. The way it reads to me is that he wants the tax return and another $1620. But definitely don't listen to me, I am not an attorney and the legalese is a bit much for me. Hopefully the others are right and he only wants the lesser amount. Good luck!

[Jacey]

Thanks...if only I had used a lawyer who could have advised me on how to avoid this whole deal! I would have been so much better off if i had filed the right day with an empty bank account, but he said it wouldn't matter.

[OhioFiler]

The trustee is saying that you cannot spend your refund and must turn it over to him while he looks at your tax returns, exemptions, etc and figures out if the tax refund is exemptable and to what extent you can exempt it and what you will have to turn over.

It would seem to me the tax refund was already listed as an exemption on the initial filing and the trustee is simply asking to see the documentation to support the filer's claim.

Tax credits and income exemptions are always overlooked and amended returns are common. One thing I've learned is it never hurts to file an amended tax return other than it can delay receipt of the refund.

What's interesting to me is that Jacey's attorney was vague describing what the trustee would take. It should have been obvious how much over the statutory exemption they were.

[Jacey]

OK--update. The trustee apparently got my tax returns in the mail and has now withdrawn his motion of objection to exemptions and has posted a report of no distribution. My attorney called and thinks this means that he doesn't even want the $1,000 of my refund that he was entitled to as it was over the exemptions. I want to jump for joy, because I was bummed out that I was losing the whole thing instead of $1K...now it looks like I may get to keep it all? I'm afraid to be happy, because I'm sure he can withdraw again, right? Anyway, bless his soul at this point...babies really do need some new pairs of shoes!

[discouraged]

I'm with you on this one. Even though we exempted my tax return, I'm not spending any of it - except the 299 filing fee until after my 341 on April 1. Do you think you can hold off spending it until you are discharged?

[Jacey]

I can try, and I think that's what I'll do...my attorney was specific about what we could exempt, but the return wasn't completed yet, so the final $$ over the exemption was in question on the day we filed. It threw me for a loop when the trustee sounded like he was asking for all of it, even though most of it was exempt. Anyway, it must have been some procedural filing that they go through when they don't have the tax returns in their hands yet. Thank goodness, and I hope it rides!