bk dismissed: tax refunds used as additional income

[bkfiler]

http://207.41.19.195/decisions/20041230-pk-DARREN_J._FRANZENBURG_LISA_A._FRANZENBURG.html

[ducksinarow]

When I filled out all the paperwork for my lawyer he figured in our tax refund as monthly income (tax refund ÷ 12).

(We filed under the old law, btw.)

[FoolAndHisMoney]

some more "hypothetical expenses". I tell you with all the bad press the new 707(b) means test is getting it seems like it's better for peoples nerves. It seems better to do the extra paperwork and know what's in store for you at the start then getting that heart stopping letter from the US Trustee filing a motion to dismiss for substantial abuse, especially when you are at the home stretch of your case. I would prefer to know ahead of time then to find out later and have to go to court.

I don't think much of these cases will be brought up now. What will happen instead is when the means test forces a debtor into a chapter 13 the debtor will have to request the hearing to rebut the presumption. It will be interesting to see if a UST will still claim substantial abuse even with IRS based expenses.

[JustChillin]

Under the old law, some of the attorneys in my district always used the past 2 years Income Tax Refunds averaged and then divided by 12 to get a monthly income amount average and added to Schedule I under additional income.

There have been absolutely no filings for BK after the 17th in my district. So I have no idea what they are doing now.

Several BK attorneys have started withdrawing from their Chapter 13 client's cases, stating they are retiring.

[Minnymouth]

A lot of them will retire - especially since NOW they going to be held accountable for their actions.....

All the sleazballs know they will get caught - and have decided its time to retire......

Just my thoughts,

Minny

[Senior Citizen]

Question. I filed Chapter 13 . Example ,a person claims $10,000 GROSS income
$3000 is withheld (Withholding tax). That person gets back $3000 income tax refund. How can $3000 be extra income? All of my income reported is based on Gross.

[FoolAndHisMoney]

Question. I filed Chapter 13 . Example ,a person claims $10,000 GROSS income
$3000 is withheld (Withholding tax). That person gets back $3000 income tax refund. How can $3000 be extra income? All of my income reported is based on Gross.

Tax refunds are usually a person getting back because they paid too much in taxes for the year. If you changed your witholding to less and get a $0 refund the you will have $250 per month and not a $3000 lump sum. That is disposable income which the chapter 13 trustee will want for distribution.

[quest42]

One of my first posts on here in early October was to ask if I should file a complete ch7 BK on Oct 14th and then amend it -- or just do the skeleton, and file the rest of the schedules in a week or two, with more time to get it right. I took the advice: do it right the first time.

So, I spent another 30 or 40 hours researching and organizing and preparing my filing. The peace of mind that comes from doing it right is paying dividends now, as I await my 341 meeting next week.