Will my Chapter 7 not be discharged until after I file my taxes in 2012?

[tyan6886]

My case was filed at the end of July 2011, I had my 341 meeting in September. While at my meeting I was told I had to submit a copy of my tax return and any refund over $1000 to the Trustee in 2012 for both Federal and State.

So are they saying my Chapter 7 won't discharge until after my taxes are filed. That will be almost 8 months later if so.

Please tell me this is not correct.

[LadyInTheRed]

You will most likely get discharged, but your case will remain open until your taxes are filed, the trustee gets any part of the refund that you have to turn over and distributes it to creditors.

Why wait 8 months to file your tax returns?

[AngelinaCat]

Hi Lady:

I believe the OP is referring to taxes for calendar year 2011, which will normally be filed on April 15, 2012. Is this correct Tyan?

BTW, welcome to the forum.

[tyan6886]

I have already supplied my taxes for the previous year, I have a so-called no asset case, I'm not sure why they would take my taxes. Do they get all of it or just some of it. If it's a no asset case how and who do they determine they are going to give money too. I think the Trustee keeps it for wiping our slates clean.

I thought bankruptcy was supposed to be a fresh start my goodness. That doesn't seem like much of a fresh start when it appears like it'll stay open for way past my 60 days. I guess this is what I get for filing it ProSe, yet if I had the money I wouldn't have had to file in the first place. I'm grateful to be past it but I wanted to done with the whole bit not have to still worry about this mess next year. Having it sit on my credit for the next 10 is bad enough.

[AngelinaCatHub]

You will most likely get discharged, but your case will remain open until your taxes are filed, the trustee gets any part of the refund that you have to turn over and distributes it to creditors.

Why wait 8 months to file your tax returns?

Greetings L in R. I believe she/he means the 2011 taxes to be filed April 15 in 2012. Not current taxes. Still I cannot see 60 days and waiting on the come for a tax return that could help the "new start". That sure would be petty. 'Hub

[tyan6886]

Yes, it's correct. The letter says tax return I file for this year to be supplied to them in 2012. Thank you for the welcome

[AngelinaCatHub]

OOooops, I've been outdone by Mrs. Really we work independently. Of course I have to still say "yes Ma'am" to her or suffer the consequence. LOL. 'Hub

[AngelinaCatHub]

Yes, it's correct. The letter says tax return I file for this year to be supplied to them in 2012. Thank you for the welcome

Does not seem right, but 'play it by ear' as the end result is still freedom. 'Hub

[tyan6886]

That sure would help with my fresh start. I initially hired an attorney, that wouldn't file anything until they entire fee that seemed to keep going up was filed. The money I gave them they kept all $575, for the phone calls they made to me, asking why I dismissed them and a so called due diligence fee, SMH, I did all the work and still can't get this to be over with it. There's a light somewhere at the end of this tunnel, where are the flashlights so I can hurry up and get there.

[tyan6886]

Yes freedom it is, I have my calendar marked for day 60, on 11/14/2011, so I have my fingers crossed to be discharged by then or I'll call the courts and be very nice when I ask why it's not done.

[mountanddo]

Well, you don't have to wait until April 15th to file. You can file on January 1 as long as you have all the documents you need. If you file electronically and request direct deposit, your refund is usually deposited quickly within 10-14 days. That way they could discharge you in January if it goes quickly enough. I find it a bit odd that they would take your tax return but it could be because you filed so late in the year. When I filed Chapter 7 I was discharged at the end of September and I got a huge refund the next year and no one wanted it from me. This was 7 years ago so things may have changed.

[tyan6886]

I always file electronically the last part of January, but the letter says, not to request a rapid refund, direct deposit and I can't endorse the check, I have to take both of them to the courts. I find this really odd, my friend filed in March and was discharged in May and she doesn't have to supply her tax return next year( she used an attorney).

I have to return my car and I was hoping to use my refund to buy me a new car outright, but I guess I can't now since he's taking it.

[LadyInTheRed]

OOooops, I've been outdone by Mrs. Really we work independently. Of course I have to still say "yes Ma'am" to her or suffer the consequence. LOL. 'Hub

LOL. I just figured the two of you are so in synch that you share thoughts.

Well, you don't have to wait until April 15th to file. You can file on January 1 as long as you have all the documents you need. If you file electronically and request direct deposit, your refund is usually deposited quickly within 10-14 days.

That's what I was thinking. I always file in mid February because I have the necessary documents by then and always get a refund. If I owed additional tax, I'd wait until April 15 to file.

I have already supplied my taxes for the previous year, I have a so-called no asset case, I'm not sure why they would take my taxes. Do they get all of it or just some of it. If it's a no asset case how and who do they determine they are going to give money too. I think the Trustee keeps it for wiping our slates clean.

If you receive a refund, part of it was from withholding that occurred before you filed. So, on the date of filing, your overpayment of tax through that date is an asset of the BK estate. If you didn't exempt the refund, your case will become an asset case and your creditors will be sent a notice to file claims. Whoever files a valid claim will receive a pro-rata share of the refund after the trustee's fee is deducted.

I always file electronically the last part of January, but the letter says, not to request a rapid refund, direct deposit and I can't endorse the check, I have to take both of them to the courts. I find this really odd, my friend filed in March and was discharged in May and she doesn't have to supply her tax return next year( she used an attorney).

I have to return my car and I was hoping to use my refund to buy me a new car outright, but I guess I can't now since he's taking it.

Well, it sounds like you'll get to keep at least the first $1,000. That can get you a decent used car outright or can be a good down payment on an even more decent one. I know it's disappointing to find out you can't keep a refund you've been looking forward to. But think of the debt you are getting rid of!

Even without a rapid refund or direct deposit, they will mail a refund check pretty quickly if you file early because they have fewer returns to process.

Since your friend filed so early in the year, the trustee may not have bothered because the portion of the refund that is an asset of the BK estate would be so small. Or maybe her past return didn't show a refund and yours did. It is also possible that her attorney exempted the refund. Without knowing more about both of your cases, all anyone can do is guess at reasons for the differences.

[BananaCabana]

JMO as I don't know your specific details.....but the trustee may not have agreed with your withholding allowances. For example, if he saw that you had an excess of federal withholding being taken out of your wages then that would indicate a large possible tax refund. Some trustees may see (again, I am not talking about you but about general BK filers) those who file for BK try to lower their w/holding allowances so more taxes come out of their check. They then might get that back in a refund. It could be seen as someone trying to 'hide' money. Instead of the creditors getting it, the filer gets it when they receive their refund after the discharge. The trustee will see this (again, possibly) as that the filer did not need this money to live on since they did not fill out another W-4 to change thier allowances so then it is fair game to claim and give to creditors when it comes back from the IRS. And if you are getting more than $1000 back in a refund, that is quite a bit of money. Most accountants would tell you you shouldn't be letting the government use your money that way when you are losing opportunites throughout the year to make that money work for you rather than for the government. Others see it as a savings vehicle for those who don't want to try and "invest it" on their own. Either way, I am sure some trustees see that as easy pickings.

Knowing we would be filing soon I tried to make sure our withholdings would make our return as close to $0 owed or refunded as possible. That way there should be very little to give to a trustee and we have been able to live off of the taxes the government would have been 'holding' for us. I hope that will turn a trustee off of our future returns but it does not guarantee it. We will soon see! They may then decide to want the next five years of any possible refunds I may have.