QUESTION
What happens to my tax refund if I'm already in Chapter 13 bankruptcy?
Asked on Apr 01st, 2012 on Bankruptcy - Mississippi
More details to this question:
Is there a way to protect some of it from the trustee? Can we at least get a portion of it to buy a car so I could find a job? Also, our bathroom needs to get fixed as it's starting to get molds because the walls/tiles are coming out.
5 ANSWERS
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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Tax refunds after chapter 13 go to the debtor, not the trustee.
Answered on Apr 04th, 2012 at 10:18 AM
Trusts & Estates Attorney serving Camarillo, CA
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Law Offices of Larry Webb
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The trustee's view on tax returns is that you got the refund because you had to much withheld therefore that "income" should actually had been in your disposable income for the plan; and the trustee takes the entire refund. You may (emphasis on may) be able to file a motion to use the income to purchase a vehicle and depending upon the trustee or the judge you might get approval.
Answered on Apr 02nd, 2012 at 5:59 PM
Commercial Bankruptcy Attorney serving Davie, FL
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Law Office of Jeffrey Solomon
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The answer to this question depends on where you live because the requirements of local practice and various chapter 13 trustees differ as to whether you must turnover the refund to the trustee.
Answered on Apr 02nd, 2012 at 5:59 PM
If your Chapter 13 has been confirmed, you should read the confirmation order in detail to see if you can keep all part or none of your refund. If you need to ask the court for permission to keep part of it for unusual expenses, you can file a motion with the court.
Answered on Apr 02nd, 2012 at 5:35 PM
Chapter 7 Bankruptcy Attorney serving Clinton, MS
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Timothy Kevin Byrne Attorney at Law
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It is important you exempt your tax refund and/or EIC on schedule C. Some trustees leave the EIC and or tax refund alone while others put some into the plan for distribution to creditors. Check with your attorney if you have one. That is what your paying the attorney for.
Answered on Apr 02nd, 2012 at 5:33 PM