No more bankruptcies until feb 2010??

[dealingsdone]

Your discharge will still happen on time.

See this thread about the difference between discharge and closing

http://www.bkforum.com/showthread.php?t=10879

You will still get your discharge about 60 days after the 341 meeting, but your case will be "open" if the trustee decides to snag your refund.

Thanks, Now what can be done to prevent/discourage the trustee from snagging the large refund I'm slated to take. I intentially overwithold since that is about the only way I save a nickel. Is there ANYWAY to prevent this or am I just completely at the trustee's mercy?

Dealingsdone

[HHM]

A tax refund is an asset, the only way to protect an asset is to have an exemption to cover it. If your state has a cash or wild card exemption, then great, if not, your screwed.

[Ann]

Okay... So if I have waited to file in December and was never told that you have to wait until February than should I just wait it out to file? I don't want to be hit with a lawsuit before I have a chance to file. I stopped paying on lines of credit and credit cards last August. Why wouldn't an attorney tell me this?

[SURV69]

Indeed . . . why wouldn't an attorney tell you that?

I get the impression that most of the attorneys doing BK's are on "auto-pilot".

I wonder how many of them actually look at your face when they're going over the paperwork. Or talk . . . or ask questions tha are not directly pertinent to the job at hand . . . the BK.

For certain they don't care about the circumstances as to how the BK came about and this to me is un-nerving.

Of course, the laws that determine exemptions and such are not of the attorney's making and he, in some ways is nothing more than a person who's been "through the mill". That is, he knows what will fly and what won't.

STILL . . . sometimes a little tweak here or there could make a big difference in the end and it would be nice to engage in, at the least, a little pre-emptive planning.

[HHM]

Okay... So if I have waited to file in December and was never told that you have to wait until February than should I just wait it out to file? I don't want to be hit with a lawsuit before I have a chance to file. I stopped paying on lines of credit and credit cards last August. Why wouldn't an attorney tell me this?

In the big picture, for most people, the benefits of the BK outweigh the loss of a single years tax refund. However, the attorney should at least present you with the choice and the pros and cons of each choice.

Option 1. File now, get your BK done an over with, but risk losing 1 years tax refund.
Option 2. Wait to file until after you receive your refund, but in the meantime realize you are subject to collection, could be sued, and you are prolonging your financial recovery by delay. Also, you have to SPEND the tax refund--properly--before you file. So it is not a matter of simply receiving it, you need to spend it too.

[MSbklawyer]

Okay... So if I have waited to file in December and was never told that you have to wait until February than should I just wait it out to file? I don't want to be hit with a lawsuit before I have a chance to file. I stopped paying on lines of credit and credit cards last August. Why wouldn't an attorney tell me this?

See my post below about refund application loans. You can "sell" your right to the refund to your tax preparer in exchange for the cash now.

[wantout]

My attorney asked me if I get large refunds, I said no, most of the time I pay in a couple hundred or get back a couple hundred.

He said that was fine, anything over $1000 and the TT would want it.

[ecsclb1724]

we're expecting to file Chapter 7 next week, why can't we just wait until mid Feb or so to file our taxes?? We're expecting about a $1,700 tax refund

[HHM]

we're expecting to file Chapter 7 next week, why can't we just wait until mid Feb or so to file our taxes?? We're expecting about a $1,700 tax refund

It doesn't matter when you file your taxes, your right to the refund already exists. It matters when you file your BK. If you file your BK now, odds are the trustee will keep your case open and give you instructions to send him a copy of your tax returns when you file your taxes, and if a refund is due, he will either take it or he won't depending on the amount (unless your state has an exemption for cash).

[dealingsdone]

I've been thinking about this now for the last few days because I am so annoyed I could lose the 5k tax refund that I was expecting. I have thought about several things and here they are.

1. Allow my ex-wife to claim the exemption for the kids and allow her to collect the EIC Tax credit on them and apply it to the child support I owe her.

2. File my taxes incorrectly and minimize my refund until after the trustee sees it, then amending them to obtain the full refund.

3. I was going to try to utilize a wildcard exemption but I don't think CA has this.

I am having a hard time just letting 5k leave me, as I really will need it by April, I always do...

[pcn]

If what you file this year varies significantly from what you filed in the past, I would be worried that it would be a flag to the trustee for more detailed investigation. Plus, if you somehow were caught intentionally hiding the money, I'd imagine it would not go well. Since the return is already "earned" could it be the same as hiding an asset, along with its penalties?

[HHM]

I've been thinking about this now for the last few days because I am so annoyed I could lose the 5k tax refund that I was expecting. I have thought about several things and here they are.

1. Allow my ex-wife to claim the exemption for the kids and allow her to collect the EIC Tax credit on them and apply it to the child support I owe her.

2. File my taxes incorrectly and minimize my refund until after the trustee sees it, then amending them to obtain the full refund.

3. I was going to try to utilize a wildcard exemption but I don't think CA has this.

I am having a hard time just letting 5k leave me, as I really will need it by April, I always do...

First, how much debt are you discharging...no offense, but grow up a little and get some perspective, given the BIG picture, that refund is going to mean nothing a year or two down the road. Having said that...as to your "ideas"

1. The EIC is exempt anyway, so you are entitled to that portion of the refund, regardless.

2. That is just plain fraud, and under IRS regulations is a criminal offense. (Filing a false tax return).

3. CA has 2 exemptions schedules, scheme 1 and scheme 2, under exemption scheme 2, you have a wildcard exemption (scheme 1 gets you the homestead, scheme 2 does not have a homestead).

[dealingsdone]

First, how much debt are you discharging...no offense, but grow up a little and get some perspective, given the BIG picture, that refund is going to mean nothing a year or two down the road. Having said that...as to your "ideas"

1. The EIC is exempt anyway, so you are entitled to that portion of the refund, regardless.

2. That is just plain fraud, and under IRS regulations is a criminal offense. (Filing a false tax return).

3. CA has 2 exemptions schedules, scheme 1 and scheme 2, under exemption scheme 2, you have a wildcard exemption (scheme 1 gets you the homestead, scheme 2 does not have a homestead).

Thanks for the useful information pertaining to the exemptions.
I will be one year behind on childsupport by the time this tax return comes and it was slated to be my lifesaver, so as far as i'm concerned 'growing up' and 'perspective' 2 years down the line are not luxories I can afford, I need to get as much of that return as possible.

[ecsclb1724]

this is so frustrating to me... WA has a wildcard exemption of 2K, but only $200 can be cash.... is it pretty common for trustees to hold cases open?

[HHM]

this is so frustrating to me... WA has a wildcard exemption of 2K, but only $200 can be cash.... is it pretty common for trustees to hold cases open?

At this time of year, yes. Realize, chapter 7 trustees can only make so much money each year. They get paid about $60 per case, then they capped at something like $175,000 which they get as their percentage from funds recovered from debtors. Tax refund time is where they probably earn about 50% of that money.

I am little shocked that this coming as a surprise to so many people.