This past March, we received a refund of $6000 for taxes. I used it to pay monthly bills and we currently have $2500 of it left. I will use some of it to pay the lawyer and whatever is left will be used to pay for this year of preschool. When I talked to the attorney over the phone, it was mentioned that the trustee might want my refund. I asked if she meant the one I might receive in MArch 2013 (for tax year 2012) and she said No... the one I received in March 2012 (For tax year 2011). How can they take that if its gone? Maybe I was confused and she did mean the one for tax year 2012. I don't expect to receive nearly what we got for tax year 2011. I didn't get a bonus this year. Any thoughts?
-
-
The refund for year 2011 should not be an issue.
As of the date you file, anything you own or are entitled to is an asset. You exempt assets, and anything that can not be exempted is subject to the trustee's whims. Money already spent is not an asset. Money you have on hand is. Research your state exemptions, to see if you can exempt money on hand. If not, then you'll want to use the $ before filing.
Tax refund paid to you in early 2013, for the current tax year, is a different story. That is $ you're entitled to now. At least part of it is. Let's say you file on Sept. 1st 2012. As of then, 8 months have already finished in 2012 so the argument is that 8/12 (or 2/3, 67%) of the tax refund for the current tax year would be an asset in your bankruptcy. Also look into whether or not there is anything you can exempt there. If your state allows a wild card exemption, it would come in handy...~Staci
Not an attorney, and never played one on tv. My responses are based on my own experiences & personal opinions.) -
Thanks Staci. I looked at the exemptions for Ohio. It looks like you can have up to $425 in cash ($850 if married) and there is an exemption of $1,150. My exemptions on my W4 are pretty high so any money we get back will be because of the kids and my husband's school tax credits. I'm meeting with the lawyer today. We'll see what she has to say.Comment
-
jodie3134,
My husband and I also received around $6000 for a tax refund this year. Out attorney said they may or may not want it, but because we were filing so close to tax time, it was more-than-likely the trustee would try to take it...UNLESS it was spent. So, we spent the money. We did vehicle maintenance, prepaid rent and all of our bills, and paid the attorney with it. It was *long gone* by the time we filed.
Lo and behold, we got a letter from the trustee asking for the refund. Every single penny. But the wording was that they wanted "funds that we *will* receive" so the trustee basically assumed we hadn't filed our taxes or received a refund before we filed for bankruptcy. I called my attorney's office when we got that letter and I was in complete hysterics because we had NO WAY to come up with that kind of money. My mentality was the same as yours-how could they come after something that is long gone?
My attorney said we were out of luck. We had to find a way to pay the trustee *or else*. Since they were no help, I actually called the trustee's office and spoke with his secretary/assistant/paralegal (whatever she was, she was extremely knowledgeable and helpful) and explained that we had received our refund two months before we even filed. They requested our bank statement showing that the refund was deposited in our bank account, as well as a statement written and signed by me stating we used all the money for expenses and no luxury purchases.
Now, we're well past our 60 days and still haven't received any paperwork, but our attorney informed us that the trustee did rule us a "no asset/no distribution" which our attorney said basically means that we're in the clear-we don't owe the trustee a penny. I'll be holding my breath until we get that paperwork, though!
I think you'll be fine
Comment
Comment