QUESTION

Can the trustee take the refund that is coming?

Asked on Feb 02nd, 2016 on Bankruptcy - Kentucky
More details to this question:
We filed 4/30/2015. It was discharged 08/3/15. I have filed taxes this month for 2015.
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7 ANSWERS

Bankruptcy Attorney serving Las Vegas, NV
2 Awards
If your case is not closed, the trustee is entitled to a copy of your return and may take your refund check. However, the trustee is only entitled to a portion of your refund. It would be the amount due you at the time you filed, so the first quarter of 2015, approximately your refund.
Answered on Feb 29th, 2016 at 5:14 PM

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Generally, once the case is over the trustee is deemed to have 'abandoned' any property left to the debtor. There are a few trustees who take a hard line on income tax refunds, and demand a pro rata share of the refund. (That is, if you filed say, on day 200 of the year 2015, the trustee might demand 200/365 of the refund.) Again, not all trustees follow that policy. Check with your bankruptcy lawyer as to the practice in your district. Good Luck.
Answered on Feb 29th, 2016 at 5:14 PM

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Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
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Unless you claimed the tax refund as exempt, if your case is open, a Bankruptcy trustee can take up to 1/3 of your 2015 tax refund, if your Chapter 7 case has remained open.
Answered on Feb 29th, 2016 at 5:14 PM

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Derek W. Freeman
The answer to this depends on several things. If the trustee submitted a statement of no distribution in your case, s/he effectively abandoned any interest in your 2015 tax refund. If there is distribution in your case, there is a possibility that the trustee could request that you turnover a portion of your 2015 refund. To do so, s/he will have to either get you to sign a stipulation agreeing to do so, or file a motion for a court order requiring you to do so. If you filed in April, that means that only 4 months of overpaid taxes are available to the bankruptcy estate. depending on the amount you're getting back, it may not be worth the trustee's time. Usually it's not. If you filed your case later in the year it would be another story. Usually if the trustee wants your tax refund, s/he will get you to sign a stipulation at the meeting of creditors. If you didn't sign anything like that, you're probably in the clear.
Answered on Feb 29th, 2016 at 5:12 PM

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Commercial & Bankruptcy Law Attorney serving Powell, OH at Ronald K. Nims
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In theory, the trustee could have a claim to a part of the refund but since you filed back in April, it's unlikely the trustee would pursue it.
Answered on Feb 29th, 2016 at 5:12 PM

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Bankruptcy Attorney serving Schenectady, NY
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Not if it is under the exempt amount.
Answered on Feb 29th, 2016 at 11:10 AM

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Real Estate Attorney serving Florence, KY at Linda S. Novakov & Associates, PLLC
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If you have been discharged and the Bankruptcy case is closed, the Trustee won't be looking at your refund. If you owe the IRS or student loans that were not discharged, those entities may be entitled to offset your refund.
Answered on Feb 29th, 2016 at 11:03 AM

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