Tax Return and Chapter 7

[huskydawgs]

I'm planning on filing Chapter 7. Should I wait to file my taxes (I'm getting about 2k for my tax return) until after I file Chapter 7? Or should I file my taxes before I file Chapter 7.

[doni49]

I think you have to file.

And even if you didn't file yet, that's still money that currently belongs to you (but the gov't is just holding onto it temporarily).


Anything you own (or are owed) that can't be exempted via the exemptions (vary state to state) automatically becomes property of the estate. If the trustee chooses to abandon specific property, it becomes yours again.

Now assuming for a minute that your tax refund can not be exempted, you could receive the refund, use it to by exempted property (like food for example), and THEN file your BK7.

[Nofilb]

An attorney told me to file and spend it before we file chapter 7...

[huskydawgs]

I'm also getting a severance pay and some PTO balance payoff because I'm getting laid off. Probably around $9,000. Should I also spend it or give that money to someone else to hold it for me before I file Chapter 7?

[LadyInTheRed]

I'm also getting a severance pay and some PTO balance payoff because I'm getting laid off. Probably around $9,000. Should I also spend it or give that money to someone else to hold it for me before I file Chapter 7?

No. If you give it to somebody else to hold, it is still your money and must be claimed as an asset on your petition. From earlier posts, it appears you do not own a home. If you don't have equity in a home that you need to exempt, California has a pretty large wildcard exemption you can use to exempt cash. But the $9,000 will also probably be included in your means test income.

What happened to your 13? Was it dismissed?

[huskydawgs]

No, I'm about 3 years into my Chapter 13. But I'm getting laid off from my job, so I can switch it to a Chapter 7 since I won't have any income.

[huskydawgs]

Does anyone have a link or document that I could use to fill in my expenses? Not sure what to include on my expense list.

Started with:


Housing & Utilities - Rent, Renters Insurance, Gas & Electric, Cell Phone

Vehicle Operating Cost - Insurance, Fuel, Repair & Maintenance, Tags & Registration

Health - Medical, Dental, Vision

Food - Grocery, Eating Out

[justbroke]

This is tough, but with a Chapter 7, any money that you have in your possession is not property of the Bankruptcy Estate. However, as pointed out by my esteemed colleague, the impact on the calculation of your disposable monthly income (DMI) may make this more complicated.

Never ever give money to someone else to "hold". You will specifically be asked if you're holding property for someone or, vice-versa, is someone holding property (money) for you! Never try to hinder, defraud or delay creditors an certainly never ever hide things from the Trustee. It could be the worst mistake ever since you could be criminally prosecuted and have ALL your debts up to that date be non-dischargeable for life.

An easy way to look at expenses is to just look at the Means Test (see legalconsumer.com). That will provide the basics.

I haven't been following your story, so I don't know if you are represented or you're looking to do this pro se. If you're looking to do this pro se, you really need to review caselaw on whether you are required to file a "new" Means Test, and the impact of that Means Test on your case (given the additional $9K in income that you are expecting).

Additionally, you may not be able to "immediately" convert to a Chapter 7. You may need to follow procedures for your District which may include going into forbearance in your Chapter 13. After several weeks/months and no job, then you may be able to convert. I'm assuming that you didn't qualify for Chapter 7 when you filed so your DMI at the time of filing "forced" you into a Chapter 13.

[huskydawgs]

Ok, I will check out LegalConsumer.com. I do have a lawyer. I just feel that even though I didn't qualify for a Chapter 7, three years ago, I may qualify now since I don't have a job. I just want to get my expenses correct as I feel in some categories, I listed them lower than was allowed so it raised my BK chapter 13 payment.